Opportunity in change

On the minds of tax and finance executives

In this latest survey, we asked tax and finance managers and executives from across the globe about topics that were high on their agenda in 2022:

• The Pillar One / Pillar Two project
• Tax governance
• Tax transparency
• Digital taxation
• Effect of EU tax directives on tax compliance
• Progress of BEPS related measures
  

	Tax governance remains high on the Board’s agenda • 77% agree or strongly agree that their group is concerned about the continuing high interest of media, political and activist groups in corporate taxation. • 66% agree or strongly agree that the C-suite and/or Board of Directors are actively engaged in establishing and/or approving their group's tax strategy and in assessing and monitoring risk in this area. • 41% of respondent groups are interested in joining a cooperative tax compliance program where available, and 18% have already joined or are in the process of joining such a program. • 85% of respondents expect an increase in stakeholder interest in tax behaviour and outcomes over the next 3 years.
	Voluntary tax transparency standards are increasingly being adopted by businesses • 60% of respondents expect their group to align its external communication in relation to its tax performance with a transparency standard. • 33% of respondents expect to increase their level of voluntary tax transparency over the next year. • 42% of respondents have an up-to-date tax transparency strategy for their group, which has been tested with the senior leadership. • 55% of respondents expect that a tax transparency strategy for their group has been or will be set up within 12 months.
	Pillar One / Pillar Two remains a ‘hot topic’ and businesses are preparing for the impact • 59% of respondents expect that a critical mass of countries will implement Pillar One / Pillar Two by 2024. • 55% of respondent groups have been actively engaged in OECD’s Pillar One /Pillar Two project consultation either directly or through other channels. • 47% expect that Pillar One / Pillar Two will result in a significant increase in their group’s global effective tax rate. • 62% does not expects that the implementation of Pillar Two will not cause groups to make significant changes to their corporate structure. • 46% of respondents have a very rudimentary analysis of the impact of Pillar Two on their tax profiles. • 55% are somewhat confident that they have readily available tax and accounting data necessary to comply with Pillar Two. • 25% of respondents expect that U.S Senate will pass a treaty to implement Pillar One by 2023.

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	Tax governance remains high on the Board’s agenda • 74% of respondents are concerned about the media coverage, political and activist group interest in corporate taxation, and 79% expect such interest to increase following COVID-19 pandemic. • 76% of Boards are actively engaged in tax governance, this has remained high over the years.
	Taxation of the digital economy remains a ‘hot topic’* • 41% of groups have been actively engaged in the OECD’s Pillar One / Pillar Two project consultation either directly or through other channels. • 62% of groups are concerned that a possible outcome of the OECD’s Pillar One / Pillar Two project will be an increase in their corporate tax liability. *these responses were provided before significant progress was made by the OECD Inclusive Framework / G20 on achieving a high level consensus on Pillar One / Pillar Two.
	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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	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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Research scope

The survey was conducted between February and April 2022. More than 160 tax and finance managers and executives from multinational companies across 21 countries responded to the survey.

In this latest survey, we were interested in the respondents’ views on the topics that were high on their agenda in 2022, such as the Pillar One / Pillar Two project and the ‘digital taxation’ debate, tax transparency, tax governance and US tax proposals, in addition to their views on the progress of BEPS related measures.

Tax podcast: 2022 Global Tax survey: BEPS and beyond

The annual Deloitte Global Tax survey gauges the views of multinational organizations on topics in the international tax space impacting them directly. In this latest episode, Deloitte leaders Albert Baker and Mike Steinsaltz highlight findings of the 2022 survey that organizations should reflect on. This includes growing concerns around tax governance, increased media interest in corporate taxation, and adoption of the OECD’s Pillar One and Pillar Two models and their impact on corporate structure, to name a few:

Pillar One and Pillar Two have been dominating tax policy landscape around the world, and based on the results of the survey, 59% of respondents expect that a critical mass of countries will implement Pillar One [and] Pillar Two by 2024.

—Albert Baker