Global Business Leaders Call for Clarity on Acceptable Tax Planningby
According to a new report from accounting firm Grant Thornton, three-quarters of business leaders in the world's most highly developed economies would gladly trade off paying higher taxes in return for greater clarity from taxing authorities on what is or is not acceptable tax planning.
The results of the survey of 2,850 businesses in 35 different economies were revealed in the most recent Grant Thornton International Business Report. When asked if they would welcome greater global cooperation and guidance on tax planning, even if it reduced opportunities to minimize tax, 75 percent of respondents answered âyes,â up significantly from 53 percent in 2014.
The trend was even more pronounced in the Group of Seven (G7) major economies around the globe. In the G7, 75 percent opted for greater clarity, up from 43 percent the prior year. The biggest advocates for change were India (95 percent), South Africa (94 percent), the United Kingdom (83 percent), and the United States (83 percent).
âThe levels of taxation paid by businesses has become a very public and emotive issue,â Francesca Lagerberg, global leader for tax services at Grant Thornton, said in a written statement. âBut setting emotion to one side, businesses have a responsibility to their investors and shareholders to keep costs down â within the existing regulatory parameters.
âDespite this, our International Business Report survey clearly shows that the vast majority would actually support paying more in tax in exchange for clearer guidance from tax authorities on what is acceptable tax planning,â she continued. âThe ball is very firmly in their court to provide the clear lines that businesses are requesting.â
Nevertheless, business leaders participating in the survey weren't overly optimistic that change would be coming anytime soon. Only 23 percent of respondents expect the Organization for Economic Cooperation and Development (OECD) plan on global tax improvement under the Base Erosion and Profit Sharing project to be implemented, down slightly from 24 percent the prior year. The OECD is an association of 34 countries designed to stimulate world trade.
Instead, global leaders are looking to individual countries to take the lead. Seventy-one percent said they would support unilateral action by their own country, with India (95 percent), the United States (82 percent), the United Kingdom (79 percent), and China (67 percent) leading the way.
âInternational tax standards clearly need to be stripped down and rebuilt for the world we live in today,â Lagerberg concluded. âThe research is showing that businesses are asking for more help to enable them to navigate the new challenges of a digital economy.â
Ken Berry, Esq., is a nationally known writer and editor specializing in tax, financial, and legal matters. During his long career, he has served as managing editor of a publisher of content-based marketing tools and vice president of an online continuing education company. As a freelance writer, Ken has authored thousands of articles for a...