Seventh annual Global survey on the OECD’s Base Erosion and Profit Shifting (BEPS)

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Finding opportunity in the midst of uncertainty

Seventh annual global survey on the OECD’s Base Erosion and Profit Shifting (BEPS) initiative and the next wave of Global Tax Reset

Deloitte’s 2020 global BEPS survey provides valuable insight into the strategies of some of the world’s largest multinational companies in the face of changes in the international tax framework.

The survey gauges the attitudes of multinational tax leaders towards the expected impact of increased media, political, and activist group interests in tax on their organizations, and probes on how multinationals are addressing the impacts of the OECD’s Pillar One and Pillar Two project and the challenges of a changing global tax landscape.

Research scope

Conducted in early 2020, Deloitte’s seventh annual global BEPS survey, which involved 296 global tax leaders in 38 countries, focused on multinational tax leaders’ experiences with BEPS and the next wave of Global Tax Reset including their impact of implementation and consequential developments within their organizations.

While the survey was conducted just before the global outbreak of COVID-19, the issues addressed in the survey will not be going away and, in the face of a global recession, it is likely that policy makers will be considering their options in a number of areas as countries enter the recovery stage. Following the COVID-19 crisis, we expect the need for tax revenues will increase and governments will be looking for additional revenue sources. It is possible that the interest in corporate taxation of multinationals may increase.

What's on the minds of tax leaders – key findings

Our survey suggests the impact of the BEPS project and other tax reform initiatives will continue to be felt throughout 2020 to 2021 as more measures begin to take effect and become embedded into local laws.

Tax governance remains high on the Board’s agenda

 71% of respondents are concerned about the media coverage, political and activist group interest in corporate taxation, and consequently, the involvement of C-suite in organizations’ tax strategies has also remained consistently high over the years

 60% of companies have implemented additional corporate policies and procedures in response to the increased scrutiny related to corporate taxation
Taxation of the digital economy remains a ‘hot topic’

• 44% of respondents expect a global consensus on taxation of the digital economy that will lead to changes

• 31% of tax leaders have been actively engaged in the OECD’s Pillar One/ Pillar Two project consultation

More than half of respondents (62%) are concerned that the OECD’s Pillar One / Pillar Two project may lead to an increase in their corporate tax liability
Cross-border coordination has room to improve

Only 23% of tax leaders agree that most tax administrations will interpret the changes to the Transfer Pricing Guidelines in a consistent manner

• 57% of groups are concerned about lack of guidance from the tax authorities around the world about the Principal Purpose Test (PPT)
Businesses are slowly securing additional resources to deal with BEPS-related changes

Despite the unprecedented degree of change in the tax laws worldwide, only 32% of organizations have secured (or plan to secure) additional resources/headcount for their tax group

Only a quarter of respondents (24%) have or intend to co-source or outsource some tax group functions due to BEPS-related changes

Increased investment in tax-related technology appears more prominent; 47% have increased their investment in technology to cope with the volume of BEPS-related changes.

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Looking ahead

The repercussions of the COVID-19 crisis, while not captured in this survey, will undoubtedly be felt by many businesses and influence the way they respond to the BEPS-related changes. It remains to be seen how policy makers will deal with the fiscal challenges presented by the pandemic and how it will impact the BEPS project in the coming months and years. However, it is likely that more tax changes are on the horizon.

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Stay informed
For an up-to-date view of the latest tax and financial measures enacted by country, access the Deloitte COVID-19 Tax & Financial Measures web portal.

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