ey-global-tax-policy-outlook-for-2015

What were the highlights of 2014 for companies
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BEPS
In 2014, the BEPS Project
really came to life. But
notwithstanding the sustained support
regard to the seven 2014 BEPS Actions
the months passed and key countries
demands. With the shift into the detail,
up their positions. With the dates of the
BEPS Action Plan inextricably linked
to the political calendar (and therefore
immobile), this led to a number of issues
being carried over for continued work
(in 2015) where full agreement could
not be reached. Indeed, only two of the
Addressing the tax
challenges of the digital economy and the
Report on the feasibility of developing a
multilateral instrument to amend bilateral
tax treaties.
countries also put in place unilateral
legislative action that could be described
as BEPS-inspired or even unilateral.
Changes to controlled foreign company
New Zealand, Peru, Russia, South
Africa and Spain) were by far the most
prevalent area of BEPS-related change in
2014, while interest deductibility, hybrid
mismatches and strengthened transfer
pricing regulations all played their
own part.
Finally, as 2014 drew toward a close,
we also saw new and novel approaches
being put in place by individual countries
and partnerships of countries. A joint
Kingdom on the subject of patent boxes
Forum on Harmful Tax Practices; the
United States was reported to have
cash boxes. And of course, the United
permanent establishment (PE) issues,
has drawn interest far and wide.
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Tax enforcement
the coin, everything points to
2014 being a year of heightened
scrutiny of taxpayers’ affairs. Sixtyeight
percent of the largest companies
surveyed for EY’s 2014 Tax risk and
controversy survey, 3 for example,
reported that they felt tax audits have
become more aggressive in the last
two years. The words “BEPS-inspired”
return once more in this regard, with
many companies reporting that they
feel some tax administrators are already
applying future BEPS concepts to
previously executed transactions. Even
if directionally consistent with the BEPS
Project, these early actions may actually
threaten the coherence of the overall
project, creating more uncertainty,
greater risk and an erosion of trust
between tax authorities and taxpayers.
Administration, adds credence to this
Tax Symposium that “I would not deny
the fact that some tax administrations
are using the BEPS brand.”
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Transparency
In 2014, tax transparency
came of age. Three key
developments stand head and
shoulders above others. First, BEPS
Action 13 makes country-by-country
reporting (and the obligation to submit
data being exchanged among tax
administrations in 2017. Second was the
July 2014 publication and subsequent
Reporting Standard, setting in motion
the reality that the world will soon
move to a model of global, automatic
exchange of taxpayer information by
2017 in many countries. Third was
the November 2014 publication by a
International Consortium of Investigative
Journalists (ICIJ) of 28,000 pages
of leaked documents relating to 548
Luxembourg tax agreements covering
343 corporations between 2002 and
2010. The November publication was
followed by a smaller batch of leaked
and set in motion a heated debate on
whether countries are also playing a role
in base erosion.
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The outlook for global tax policy in 2015 |
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