MONTRÉAL, Sept. 15, 2014 /CNW Telbec/ - As the Organisation for Economic Co-operation and Development (OECD) prepares to deliver the first phase of its Action Plan on Base Erosion and Profit Shifting (BEPS) 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 increased transparency on acceptable planning, updated tax rules for a modern, digital economy and the harmonization of global corporation tax rates.
Francesca Lagerberg, global leader for tax services at Grant Thornton, based in London, 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", stated Eric Labelle, International Tax Partner at Raymond Chabot Grant Thornton. He added that: "In Quebec, the survey showed that 71% senior executives interviewed consider tax policy and tax risk as a priority for their business. 56% would like to see an improvement in harmonizing global corporation tax rates and updating tax rules for a modern, digital economy."
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%). Business leaders in Latin America (92%) also want to see updated tax rules for a modern, digital economy, ahead of Europe (68%), North America (65%) and Asia Pacific (39%). Harmonizing 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 concluded: "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. The road ahead is undoubtedly bumpy, but the potential rewards are worth the tough journey."
For an interview with Eric Labelle after the release of the OECD's recommendation tomorrow, on September 16, please contact Francis Letendre (see below). To attend the OECD web presentation of this report and for more information, go to: http://www.oecd.org/tax/oecd-to-release-first-recommendations-for-combating-international-tax-avoidance-by-multinational-enterprises-on-tuesday-16-september-2014.htm.
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 is managed by Grant Thornton's core research partner – Experian. Questionnaires are translated into local languages with each participating country having the option to add a small number of country-specific questions to the core questionnaire. Fieldwork is undertaken on a quarterly basis. The research is carried out primarily by telephone.
IBR is a survey of both listed and privately held businesses. The data for this release are drawn from interviews conducted in May 2014 with 2,500 chief executive officers, managing directors, chairmen or other senior executives from all industry sectors.
About Grant Thornton
Grant Thornton is one of the world's leading organizations of independent assurance, tax and advisory firms. These firms help dynamic organizations unlock their potential for growth by providing meaningful, forward-looking advice. Proactive teams, led by approachable partners in these firms, use insights, experience and instinct to understand complex issues for privately owned, publicly listed and public sector clients and help them find solutions. More than 35,000 Grant Thornton people, across over 100 countries, are focused on making a difference with clients, colleagues and the communities in which they live and work.
About Raymond Chabot Grant Thornton
Founded in 1948, today Raymond Chabot Grant Thornton is a leader in the fields of assurance, tax, consulting services, business recovery and reorganization. Its strength is based on a team of more than 2,400 people including some 230 partners in more than 100 offices in Quebec, eastern Ontario and New Brunswick. For the past 30 years, Raymond Chabot Grant Thornton has been a member of Grant Thornton International Ltd, providing its clients with the expertise of member and correspondent firms in more than 100 countries.
SOURCE: Raymond Chabot Grant Thornton
For further information: Francis Letendre, Senior advisor - Public Relations, Raymond Chabot Grant Thornton, Tel.: 514-390-4201, [email protected]; Information on the research presented: Dominic King, Global research manager, Grant Thornton International Ltd, Tel.: +44 (0)207 391 9537, [email protected]