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CFOs: Expansion Plans Have Been Curbed By Tax Measures

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CFOs: Expansion Plans Have Been Curbed By Tax Measures

by CFO Innovation Asia Staff, 18 July 2012
topics:
Accounting and Regulations Tax
tags:
tax tax audits
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The second global survey of multinational CFOs conducted by Taxand, a global organisation of tax advisors to multinational businesses, has shown that scrutiny and compliance demands are stalling the growth plans of corporates across the globe. 
 
Multinationals are facing an ever greater level of scrutiny globally, often experiencing pinpointed investigations, which are now likened to a rifle shot rather than a shot gun approach. 
 
Almost half (48%) of multinationals believe their expansion plans have been curbed by overzealous tax authorities.
 
The survey also finds that 78% have seen a continued increase in the number of tax audits undertaken by tax authorities, and 76% agree that rising tax transparency and reporting measures have further increased the cost of compliance.
 
International tax, which includes all cross border activity and international tax incentives, is the largest growing concern for multinationals (up 5% year on year), amidst substantial inter-country competition for inward investment.
 
Multinationals say tax is not the answer to economic woes, as an overwhelming 76% of global respondents do not believe that economic turmoil can be resolved through tax policy.
 
Governments' ability to assist multinational companies amid recession is a concern of 63% of respondents.
 
The study also finds an increasing pressure on tax resources, with 6% identifying this an issue year-on-year. Meanwhile, transfer pricing remains the most challenging area of tax for multinationals, with 20% of CFOs pointing to this. 
 
The report also highlights that 72% of multinationals now feel that public exposure to tax planning could be detrimental to a company’s reputation, significantly increasing from 53% in 2011.
 
Multinationals also see a marked improvement in their relationship with tax authorities over the last year, jumping from 61% in 2011 to 84% in 2012.
 
 
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