Taxes are used as a policy instrument in a variety of ways, and how tax revenues are raised can influence economic activity. While a number of principles have come to inform the design of efficient tax systems, governments, economists, and other professionals inevitably disagree about the combination of tax policies that will achieve particular aims, whether that is raising revenue, redistributing wealth or helping regulate behaviour.
Multinational corporations experience the impact that those policies, and the way they are implemented, can have on their organizations every day. Tax policy-making trends constantly change and the level of cross-border collaboration between governments is growing. We think that these factors will play an increasingly important part in companies' decision-making on a global basis.
Global policy trends: Be informed, take action
Our trends series provides a twice-yearly report on significant global tax policy developments, providing insight and analysis of the key global trends in the development of tax policy worldwide. In this series we're using our expertise to extrapolate into the future the tax trends of today, helping you to determine the best strategies for your organisation.
Edition 1 - Tax policy and administration: Global trends
In our inaugural edition of Global trends we start by looking at the current status of some of the longer term tax plans that have been announced before turning to specific policy moves. Some of the topics covered in this edition include stimulating growth and cutting deficits, base broadening and rate reduction, the shift from direct tax to indirect tax, the increase in inter-state collaboration to counter tax avoidance, economic substance and GAARs, and risk-based approaches to compliance and tax audits, amongst others.
"In line with the Five year Plan, in 2012 the tax focus is likely to be on the pilot programme for VAT to replace business tax in key service areas"
“Marginal tax rates of over 50% in most autonomous communities in Spain, and even 56% in one autonomous community, have not been seen in Spain for more than 20 years.”
“Base broadening in light of any federal tax rate cut is likely to be focused on repealing or limiting tax provisions that result in taxable income being less than income reported on financial statements (which may be referred to in political discourse as ‘eliminating tax loopholes’).”
"If the proposal is adopted by the Member States in Council – either by all of them or by at least nine Member States under a special procedure – multinational companies would need to rethink their EU tax strategy”