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The number of countries reporting an increase in the overall CIT burden for 2015 is accelerating slightly, from 26% in 2014 to 31% (10 of the 32 countries surveyed) in 2015. The reductions are relatively marginal: Australia (–1.5 percentage points (pp)); Portugal (–2pp); Spain (–2pp); and the reduction is a forecast and is not based on a known proposal. The other 24 countries all forecast steady headline CIT rates, and Chile is alone in announcing a CIT rate increase in 2015. Australia and Spain both stand out as unusual cases in 2015, together forecasting headline CIT rate reductions and a parallel overall increase in the CIT burden. While the incidence of CIT rate reductions seems to be slowing very slightly (22% of countries surveyed are forecasting a rate reduction in 2015, versus 26% in 2014),) the number of countries reporting an increase in the overall CIT burden for 2015 is accelerating, albeit mildly — from 26% in 2014 to 31% (10 of 32 countries) rate, broad-based trend continues to be Japan, Portugal and the United Kingdom) forecast a decreased CIT burden for 2015, with the remaining 17 countries forecasting a stable CIT burden in 2015. Countries with National/ Presidential elections in 2015 (dates listed where known) Canada — Autumn 2015 Finland Italy Mexico (Chamber June 2015 Poland Portugal — Spain — November 2015 Switzerland — Thailand — Late 2015 United Kingdom — 7 May 2015 So from which part of the corporate tax regime are burden increases being delivered While perhaps not delivering the highest overall volume of tax revenues, it is interesting to note that tackling hybrid mismatches via new prevalent new measure reported among the 32 countries (11 of 32). For an issue that was reported by no countries in our 2014 publication, this is a stunning upward trajectory and indicative of the global focus on BEPS, even in the 8 | The outlook for global tax policy in 2015
The strong focus on the tax treatment of interest and other business expenses that we saw in 2011–14 seems to be sustained through 2015. Enforcement Ten of the 32 countries (31%) surveyed report known or forecasted increases in tax enforcement in 2015. This has slowed a little from our 2014 outlook publication, where the percentage was 39%. It does, of course, still represent an that many tax administrations aligned their increased enforcement levels with the initial announcement of the BEPS forecast an overall improvement in the tax enforcement landscape in 2015. Transfer pricing Transfer pricing remains a key focus for many countries, with nine of the 32 countries (28%) forecasting a rising tax burden in 2015 in relation to known or potential changes. This is an acceleration importance of transfer pricing for business, where companies responding to EY’s 2014 Tax risk and controversy survey 6 say it remains their leading source of tax risk. Research and development (R&D) Eight of the 32 countries (25%) report known to be or expected to become more generous overall in 2015. In contrast, three countries (Australia, Finland and will become less generous in 2015. of its falling headline CIT rate, the overall incidence of countries making accelerating. The picture is not quite that simple, however. Many countries are decreasing the generosity for large enterprises, while increasing the availability (and generosity) of incentives to small and medium-sized enterprises. and European crises are now behind them, and it indicates that a larger proportion of future economic growth is projected to come from the middle market business segment. Seven of the 32 countries (22%) report that other business tax incentives (such as accelerated depreciation or capital allowances) are either known or expected to become more generous overall in 2015. Four countries (Luxembourg, Slovak Republic, Spain and Switzerland) be reduced in 2015. Losses Six years after the height of the of changes in tax legislation in relation to the treatment of losses continues to dissipate, as reported in both our 2013 and 2014 outlooks. Just four of the 32 countries (15%, Chile, Hungary, Japan and the United Kingdom) report that the tax burden will rise in their country in 2015 as a result to changes to the tax treatment of losses; Japan’s rising burden relates to one of the basebroadening measures to pay for a 2.5– percentage–point 2015 headline CIT rate cut. Twenty-seven of the 32 countries report no known changes to the tax is forecasting a reduction in tax burden as a result of the tax treatment of losses. The strong focus on the tax treatment of interest and other business expenses that we saw in 2011–14 seems to be sustained through 2015. Seven of the 32 countries (22% — Australia, Chile, China, France, Slovak Republic, South Africa and Spain) report that the tax burden is forecast to rise in their country in 2015 as a result of changes to interest deductibility. The remaining 25 report no known changes to the treatment of interest deductibility. policymakers, though to a lesser extent than those outlined above. Capital gains taxes, thin capitalization and CFC rules are all reported as anticipating change the latter issues, it is likely that the majority of countries are awaiting the unfolding of the 2015 BEPS Actions (Action 3 addresses CFCs) before making any changes. This is a good but is not guaranteed. The outlook for US tax reform Any outlook for taxes in 2015 would not be complete without some discussion of whether 2015 will be the year that US tax reform progresses. The desire to reform the US tax system in order to increase US competitiveness relative to some of its trading partners that have lower corporate income tax rates and territorial tax systems remains intact. In recent years, though, ideological differences have hindered efforts to advance such debate. The Republican Party will control the legislative agenda in 2015, and those who lead the taxwriting committees support tax reform. Possible compromise with President as both parties see opportunities for economic growth, including via business tax reform. However, overcoming the political hurdles to craft the details of such legislation will be challenging. 6 The outlook for global tax policy in 2015 | 9
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Page 39 and 40: Australia The following election go
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China 2 | 2015 tax policy outlook
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China • • Top marginal persona
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China 2.4 Tax policy outlook for 20
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China 2.10 Pending tax proposals
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Czech Republic 2 | 2015 tax policy
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Czech Republic 2.5 Fiscal stimulus
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Denmark 2.2 Fiscal consolidation vs
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Denmark 2.7 Current tax policy and
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Finland 2.2 Fiscal consolidation vs
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Finland 2.8 Key tax policy changes
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France 2.2 Fiscal consolidation vs.
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France exceeds €1 million. Remune
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Germany 2 | 2015 tax policy outlook
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Germany 2.4 Tax policy outlook for
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Germany 2.9 Country position on OEC
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Greece 2.2 Fiscal consolidation vs.
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Greece 2.7 Current tax policy and t
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Hungary 2.2 Fiscal consolidation vs
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Hungary 2.5 Fiscal stimulus in 2015
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India 2 | 2015 tax policy outlook 2
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India 2.4 Tax policy outlook for 20
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India • Action 8 • The Indian t
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Ireland 2.2 Fiscal consolidation vs
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Ireland 2.8 Key tax policy changes
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Ireland 2.11 Consultations opened/c
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Italy 2 | 2014 tax policy outlook 2
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Italy 2.7 Current tax policy and ta
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Japan 2.2 Fiscal consolidation vs.
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Japan • • for each stock owne
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Japan 2.9 Country position on OECD
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Luxembourg 2 | 2015 tax policy outl
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Luxembourg 2.4 Tax policy outlook f
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Luxembourg 2.10 Pending tax proposa
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Malaysia 2 | 2015 tax policy outloo
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Malaysia 2.3 Tax policy outlook for
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Malaysia 2.9 Country position on OE
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Mexico 2.2 Fiscal consolidation vs.
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Mexico 2.7 Current tax policy and t
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Netherlands • Additionally, the C
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Netherlands 2.4 Tax policy outlook
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Netherlands exemption, the tax tre
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New Zealand 2.2 Fiscal consolidatio
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New Zealand 2.6 Political landscape
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Poland 2.2 Fiscal consolidation vs.
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Poland 2.5 Fiscal stimulus in 2015
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Portugal 2 | 2015 tax policy outloo
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Portugal 2.4 Tax policy outlook for
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Russia 2 | 2015 tax policy outlook
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Russia 2.4 Tax policy outlook for 2
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Russia 2.9 Country position on OECD
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Slovak Republic 2.2 Fiscal consolid
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Slovak Republic VAT, GST and sales
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South Africa 2.2 Fiscal consolidati
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South Africa 2.8 Key tax policy cha
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South Korea 2.2 Fiscal consolidatio
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South Korea 2.6 Political landscape
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Spain 2.2 Fiscal consolidation vs.
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Spain 2.5 Fiscal stimulus in 2015
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Switzerland 2.2 Fiscal consolidatio
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Switzerland 2.5 Fiscal stimulus in
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Thailand • Continued sluggish eco
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Thailand 2.4 Tax policy outlook for
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Thailand 2.10 Pending tax proposals
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United Kingdom 2.2 Fiscal consolida
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United Kingdom 2.5 Fiscal stimulus
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United Kingdom 2.11 Consultations o
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United States • There is a desire
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United States 2.4 Tax policy outloo
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United States • Committee • C
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