Deloitte’s European Tax Survey shows that BEPS is very high
on the agenda of Belgian tax directors
97% of Belgian companies responding to the survey have been subject to a tax inspection in the past 3 years
Brussels, 21st January 2016 – Deloitte today released the results of its “European Tax Survey”. The survey, conducted in 21 countries, gauges the findings of tax directors working for (multinational) companies in terms of the tax climate in Europe and the challenges they are faced with.
The most striking findings to emerge from the survey are as follows:
- A little over half of the directors surveyed believe that the OECD action plan in relation to ‘Base Erosion and Profit Shifting’ (BEPS) is ‘important’ to ‘very important’ for their company (53%). In Belgium, that percentage rises to 85% and has doubled compared with last year.
- The number of inspections conducted by the Belgian tax authorities is far higher than the European average (65%). Over the past three years, virtually all of the multinationals surveyed in Belgium (97%) have had a tax inspection.
Impact of BEPS on companies in Belgium
After gaining the approval of the G20 countries, the OECD introduced “Base Erosion and Profit Shifting” (BEPS) in 2013. This action plan is designed to halt to a number of “anomalies in international tax matters”, such as hybrid financing.
85% of the tax directors working for multinationals located in Belgium believe the BEPS project is very important for their tax department (compared with 44% last year). In response to the plan, 71% of Belgian respondents are currently reassessing their company’s current international tax strategy. The vast majority also fear that BEPS will lead to higher administrative charges.
Piet Vandendriessche explains: “BEPS is very high on the day-to-day agenda of our clients. The senior management of multinationals in Belgium is also paying increasing attention to BEPS. This was the case for 62% of the people surveyed this year – twice as many as last year and significantly
higher higher than in the rest of Europe (40%). Nor does it come as any surprise that three-quarters of Belgian tax directors think that BEPS will lead to higher administrative charges.”
Tax inspections in Belgium
Virtually all (97%) of the multinationals surveyed have had a tax inspection in the past three years. For over three-quarters of the respondents, the inspection related to a check on corporate tax, and for over half of them, it was a VAT inspection. The Belgian government does far better than the rest of Europe in this regard, where only 65% of multinationals have been inspected in the past three years.
Tax uncertainty and complexity continue to play tricks on tax directors in Belgium
The European Tax Survey also shows, as it did last year, that tax uncertainty and complexity continue to be the main concerns in the eyes of tax directors working for multinationals located in Belgium.
More than half of the directors surveyed in Europe (54%) believe that there is a high degree of tax uncertainty in their country. In Belgium, that percentage rises to 76%, meaning that our country is perceived as one of the countries where there is no tax stability. Other countries that score poorly in this area include Italy and France. Our main rivals in attracting investments –
the Netherlands, Luxembourg and Switzerland – score significantly better in terms of tax stability.
The main causes of uncertainty in Belgium and other European countries are the frequent changes to legislation and a lack of clarity and unambiguity in the views taken by the tax authorities.
Piet Vandendriessche, Managing Partner Tax & Legal at Deloitte Belgium, adds: “Every day we hear from our clients that tax stability is very important for them. In recent years, Belgium has lost much of its tax competitiveness. Increasingly commonly our credibility is coming under threat, particularly now that the European Commission has condemned Belgium for entering into excess profit rulings with dozens of multinationals. Our survey was completed prior to the European Commission’s announcement. If we were to conduct the survey again now, it would not surprise me if the results were even more pronounced.”
Tax directors argue for tax stability and a reduction of labour charges in order to increase Belgian competitiveness
62% of the directors surveyed in Belgium argue for a simplification in tax and more security regarding the future of the taxation system in order to increase our country’s competitiveness. They also believe that a lowering of tax and tax-assimilated charges on labour and companies would benefit competitiveness in Belgium.
Piet Vandendriessche says: “Since the current government came into office, it is true that some work has been done on lowering labour charges. By the end of this parliamentary term, employees will take home more of their gross pay, while employers will pay less for social charges, as can be seen from the European Pay Survey published by Deloitte in December. This means that Belgium’s competitiveness will make progress, mainly with regard to lower wages.”
About the survey
Deloitte conducted the European Tax Survey in the autumn of 2015. In total, 803 tax directors from (mainly) multinational companies in 21 European countries took part on the online survey.
The majority of respondents (70.7%) work for companies with a turnover in excess of € 100 million. 55.4% work in a senior managerial role, 28% as tax director and 27.4% as finance director (CFO). The remainder work as senior managers or managers in tax, finance and accounting.
The aim of the survey is to produce a picture of the tax climate in Europe and the challenges facing tax directors in their jobs. The survey shows which countries are considered to be the most difficult or the most attractive in terms of bringing in investments and managing a company.
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