European tax survey: The benefits of stability has been saved
European tax survey: The benefits of stability
How are challenging internal and external environments affecting heads of tax? What keeps heads of tax awake at night? Which jurisdictions are perceived as the most challenging and where in Europe does it seem it is becoming easier to do business? Nearly 1000 companies were surveyed.
European tax directors ‘seek tax certainty’: Europe’s business directors have revealed the areas of the tax system which they would like to see improved
The tax directors of major European companies are keen to see more certainty about the future of the financial regimes they work under, along with simpler regulations, according to new Deloitte research.
The business advisory firm indicated that 44% of the company directors it polled feel certainty about the future is the factor which could improve their country’s tax laws to the greatest extent.
Meanwhile, 36% said the creation of a simpler tax system would have the biggest impact.
Fears over tax uncertainty
Almost two thirds of the respondents (61%) said they believe a high degree of domestic tax uncertainty is the main factor holding back their ability to do business in Europe.
Key challenges in this area are said to include frequent changes to legislation, and issues with tax authorities’ publicly available guidance.
Stability ‘remains a priority’
Andrew Hodge, head of tax at Deloitte in the UK, said directors prioritize a stable system of tax legislation above all else. He added: “They do not like uncertainty and they cite frequent legislative change as the thing that they would reduce in order to make their own countries more competitive.”
UK and Netherlands score highly
In terms of inward investments, Deloitte reported that the UK and the Netherlands are Europe’s preferred tax jurisdictions, with 31% and 40% of directors favoring these countries respectively.
Russia was named as the country that businesses find the most challenging.
Mr. Hodge said: “Both the UK and Netherlands have worked hard to become more attractive to multinational companies, and this seems to be working. This appears to be as much about predictability and stability as it does about underlying rates of tax.”
Among its other findings, Deloitte said 51% of directors have not yet been required to justify their tax strategies to internal stakeholders, while 67% have not had to explain them to external stakeholders.
But the research found that those operating in Western Europe are facing greater pressure than their counterparts in eastern European nations, with tax becoming a key area of public debate and scrutiny in UK and France.