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European Tax Survey 2014

Rising to the challenge

In order to understand the impact of economic and financial trends and the potential impact of change on the tax department of today, as viewed by tax professionals across Europe, Deloitte has undertaken its second annual European Tax Survey.

The 2014 Deloitte European Tax Survey was conducted in Autumn 2014 against the backdrop of an external environment that continues to be challenging. While growth, albeit slow, has returned to a number of European countries, the euro area remains a source of weakness. The OECD, at the behest of the G20, launched an Action Plan on Base Erosion and Profit Shifting (BEPS) in 2013 to update international tax principles for modern trading patterns and to reflect the importance of integrity and fairness in the international tax system. In order to understand the impact of these trends and the potential impact of change on the tax department of today, as viewed by tax professionals across Europe, Deloitte has undertaken its second annual European Tax Survey.

The 2014 European Tax Survey revelead: 

  • The Netherlands and the UK were seen as the most favourable of the large jurisdictions from a tax perspective;
  • Italy was seen as the most challenging of the seven large European economies from a tax perspective, followed by France and Russia;
  • Similar to last year’s survey, the tax professionals surveyed valued stability and a simplified tax system most highly. The most commonly selected reasons for tax uncertainty were frequent changes to tax legislation and interactions with tax authorities;
  • Nearly 85% of Greek respondents said that more certainty around the future would contribute to their country’s competitiveness, followed by a simplified tax system and a predictable and collaborative tax authority;
  • The vast majority (92.3%) of Greek respondents think that the main challenge they face is a high degree of tax uncertainty in their own country. This group also refers to, ambiguity, weakness and reversals in the tax authorities’ doctrine of publicly available guidance (84.6%) and frequent changes to legislation (76.9%);
  • From those who had started planning for the BEPS impact, half had taken steps to ensure they meet the new compliance requirements of transfer pricing documentation, and 11% have considered hybrids. There was, however, acknowledgement that tax strategy will be affected by BEPS, and it would probably increase the cost of compliance.
  • The Effective Tax Rate was not the most important measure of success for tax professionals – compliance (e.g. filing tax returns on time), and close collaboration with the business and its strategy were far more important as measures of success.
  • As pressure points, changes in tax legislation appeared to be the most burdensome to respondents.
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