A third of companies worldwide (34%) anticipate a significant increase in their group’s global effective tax rate, as a result of the implementation of the two-pillar global tax reform coordinated by the Organization for Economic Co-operation and Development (OECD), down from 47% in 2022, according to Deloitte 2023 Global Tax Policy Survey. Perception improvement occurred as many jurisdictions have made progress in developing domestic legislation to introduce the global minimum corporate tax, according to Pillar II of the OECD reform, and based on the clarifications regarding the implementation of the new rules, 67% of participants in the survey mentioned that they did not expect this measure to cause significant changes to their corporate structure.
According to the study, 85% of participants expect a critical mass of countries will introduce the global minimum corporate tax by 2025. Regarding the provisions aimed to a fairer distribution of taxing rights and profits among the countries in which they are obtained, according to the first pillar of the OECD reform, only 51% expect a mass implementation in the near future, as 69% of respondents expect that the United Sates Senate will not pass a treaty for the implementation of this pillar by 2025.
"The findings of the study indicate that multinational groups are becoming more familiar with OECD recommendations and European regulations, aiming to eliminate erosion and profit shifting practices, and are making efforts to comply. More steps have been taken on Pillar II, regarding the global minimum corporate tax, as the European Union, but also other jurisdictions, have already adopted it. In the case of Pillar I, as the study shows, expectations are moderate, especially due to the deadlock experienced in the United States. In these circumstances, there is still a need for clarity of tax rules and consistency of interpretation, so that companies, already burdened with many reporting obligations, can follow the compliance process as easily as possible. Thus, the tax authorities of the member states must amend domestic legislation to be consistent with European regulations. In Romania, this aspect is even more important, considering that the recently adopted turnover tax on large companies changes the domestic tax landscape and makes the implementation of the global minimum corporate tax more difficult," said Dan Badin, Tax Partner, Deloitte Romania.
Regarding the recent proposal of the European Commission, BEFIT (Business in Europe: Framework for Income Taxation), which aims to create a common corporate tax base for the member states, 65% of respondents are not optimistic that it will simplify their group’s corporate tax compliance in the EU. At the same time, 47% estimate that ATAD III (Anti-Tax Avoidance Directive III or Unshell Directive), the directive which aims to discourage the use of shell entities to reduce the tax burden, will cause groups to make changes in their corporate structure, but they have not made any yet.
According to the study, two-thirds of respondents are concerned about the lack of guidance from the tax authorities around the world about the principal purpose test, aiming to set if a transaction main purpose is to obtain inappropriate tax benefits.
Looking ahead, environmental taxation, particularly carbon taxation, could be the next focus area where the international tax community will need to agree on a common approach. In this perspective, 39% of respondents have started to analyze the impact of environmental taxation on their businesses and operations.
Deloitte 2023 Global Tax Policy Survey is the tenth edition of Deloitte Global BEPS Survey, conducted annually among tax managers and CFOs, in order to analyze the impact of the international tax reform implementation on companies worldwide. This year's survey involved more than 200 tax leaders in 28 countries.
