29 September 2016
The results of a recently conducted global survey of 2,600 businesses in 36 countries, finds little impact from the OECD BEPS programme which was finalised last October, as 78 percent of the surveyed businesses said that they have not changed their businesses approach to taxation, despite more than 80 countries having agreed to adopt at least the minimum elements of the BEPS Action Plan. However, as per the survey, it is interesting to note that India is one of the countries where BEPS has had the greatest impact on business tax planning. Around 35 percent of businesses surveyed said that they have changed their tax approach following the new guidelines. A few other countries witnessing the BEPS impact include Nigeria (38 percent) and Indonesia (35 percent).
As part of the BEPS plan, businesses are being asked to provide corporate tax information to local and international authorities. The survey reveals that the two biggest concerns for Indian businesses post the BEPS implementation, is the administrative burden of collating the tax information and how the information would be interpreted by the authorities. Also, when asked about their preference on whether they would like to be taxed on their profits or rather pay a tax on their transactions, 87 percent Indian businesses preferred to be taxed on profits.
“The survey results indicate that while BEPS has not yet captured the discussion boards in management meetings in most parts of the world, in India, it is being discussed and companies are taking note of this international tax reform. The result is not really surprising when viewed in the context of the anti-tax avoidance initiatives and tax reforms being taken by the Indian government. BEPS can potentially impact the business environment in many countries and Indian multinationals are rightly factoring it in their business tax planning”, said Arun Chhabra, Director, Grant Thornton Advisory Private Limited.