Tax Legislation Uncertainty Unsettles CFOs
Multinational corporations (MNCs) and their chief financial officers (CFOs) are suffering from increasingly confusing messages around tax legislation by regulators and governments worldwide, according to Taxand.
The tax advisory group’s just-released annual global survey of multinational CFOs shows 74% of respondents agreeing that regular political discussion around potential new tax measures is causing uncertainty amongst business decision makers.
Confusion dominates the global tax arena, the group reports Court cases, political and media scrutiny of multinationals’ tax planning, frequent amendments to legislation, retrospective taxes and the introduction of new cross border tax measures such as the European Union’s (EU) proposed financial transaction tax (FTT) and guidelines such as base erosion and profit shifting (BEPS) has led to an air of uncertainty. The absence of legislative stability and consistency is impacting the confidence of those with the power to fuel the global economy.
Survey responses from Europe, the Americas and Asia, and also produced the following key findings:
Frédéric Donnedieu de Vabres, chairman of Taxand, said that the uncertainty around tax is damaging multinationals’ confidence to invest and subsequently hindering the global recovery.
“As governments and politicians have honed their focus on multinationals’ tax practices, dealing with the potential reputational risk arising from media and public scrutiny has remained a key issue for many companies. The need for multinationals to be confident in their tax planning has never been stronger.”