Global business survey finds businesses calling for global agreement on tax planning and updated tax rules for a modern, digital economy

LONDON, Sept. 15, 2014 /PRNewswire/ -- As the OECD¹ prepares to deliver the first phase of its BEPS² action plan in Australia this week, the Grant Thornton International Business Report (IBR), a survey of 2,500 senior executives in 34 economies, finds the majority of businesses calling for more transparency on acceptable planning, updated tax rules for a modern, digital economy and the harmonisation of global corporation tax rates.

Francesca Lagerberg, global leader for tax services at Grant Thornton, said: "We have been tracking business sentiment on the need for more transparency in tax planning since news surrounding the tax practices of large multinationals such as Amazon, Google and Starbucks, broke last year. And the response has been pretty clear: business leaders want things in black and white. They have a responsibility to their investors and shareholders to keep costs down. In their words, simply telling them to pay their 'fair share' is not proving to be a viable alternative to a clear set of rules or principles."  

"That is why we are fully supportive of the work being undertaken by the OECD which should go some way to allaying business concerns by moving this debate away from talk to action. International tax standards clearly need to be stripped down and rebuilt for the world we live in today. The existing legislation is no longer fit for purpose in an increasingly interconnected, digital world in which the definition of a 'border' is archaic and next to meaningless."

Businesses in Latin America (92%) and Europe (76%) particularly think that the global tax systems could be improved by providing more transparency in what is acceptable tax planning, ahead of North America (60%) and Asia Pacific (44%). In Latin America (92%) again business leaders want to see updated tax rules for a modern, digital economy, ahead of Europe (68%), North America (65%) and Asia Pacific (39%). Harmonising global corporation tax rates is advocated by the majority of businesses in Latin America (87%), Europe (64%) and North America (62%).

A further 82% of business leaders cite tax policy and risk as a priority and 39% as a major priority. A further 44% believe G20 action on transparency and avoidance would help them grow their operations, but just 23% believe this is likely to get the required global agreement.

Francesca Lagerberg added:
"Tax planning emerges as a major issue for business leaders around the world and the call is for global action to update transfer pricing guidance to boost growth prospects. You just have to look at recent climate change negotiations to see how hard it is to build multilateral agreements on complex issues where different territories are fighting to protect sovereignty. But I am hopeful that momentum will build when the first phase of the OECD action plan is released later this month. The road ahead is undoubtedly bumpy, but the potential rewards are worth the tough journey."

Notes to editors
The Grant Thornton International Business Report (IBR) provides insight into the views and expectations of more than 10,000 businesses per year across more than 30 economies. This unique survey draws upon 22 years of trend data for most European participants and 11 years for many non-European economies. For more information, please visit: www.internationalbusinessreport.com

Data collection
Data collection is managed by Grant Thornton's core research partner – Experian. Questionnaires are translated into local languages with each participating country having the option to ask a small number of country specific questions in addition to the core questionnaire. Fieldwork is undertaken on a quarterly basis. The research is carried out primarily by telephone.

Sample
IBR is a survey of both listed and privately held businesses. The data for this release are drawn from interviews with 2,500 chief executive officers, managing directors, chairmen or other senior executives from all industry sectors conducted in May 2014.

¹Organisation for economic cooperation and development
²Base erosion and profit shifting