Shifting sands: risk and reform in uncertain times

Deloitte has released the third edition of their Asia Pacific Tax Complexity Survey report.

331 executives across the region participated in the Survey. Responses to the 2017 survey reflect the escalating complexity in the tax environments in Asia Pacific jurisdictions in the three-year period since the last survey. In the shifting sands of tax policies, respondents are increasingly cautious about their companies’ tax strategy with BEPS reforms being translated into domestic legislation in many jurisdictions.

Highlights of the key findings and insights include:

• Governments are under pressure to secure their tax base, tax reforms, and increased frequency of tax audits will remain in the spotlight.

• Predictability and consistency in tax regimes, while desired by companies, remain elusive. Yet, in uncertain times, taxpayers seek stability.

• BEPS is top of mind for both governments and companies. Changes to tax laws are expected in several countries in Asia Pacific as a result of BEPS.

• Tax strategy of companies are increasingly conservative in this uncertain economic environment.

• Operating across multiple Asia Pacific jurisdictions can be a balancing act for multinationals as tax environments can be vastly different.

As for China:

• There is a contrast in respondents’ views on China; many respondents view the country’s tax environment to be predictable, while others view it to be unpredictable. This contrast may be because in China tax administration is not administered or collected centrally; therefore treatment and interpretations by the local officials across the country may be different and inconsistent.

• Unchanged from 2014, the tax regimes in China and India have the strongest influence on companies’ investment decisions.

• Regarding areas of tax reforms, transparency in tax statistics is a top priority in China, along with timeliness and quality of tax audits.
  

Download the Survey report to explore these observations in further detail.

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