MANY businesses lack the systems or resources to meet new global tax disclosure and transparency requirements, according to an EY report.
The report, which surveyed 962 tax and finance executives in 27 jurisdictions, found more than two thirds of respondents said they would need additional resources in order to gather and provide the information required following the OECD’s base erosion and profit shifting (BEPS) project and increasing government clampdowns on tax avoidance.
Given increasing scrutiny of business’ tax arrangements by the OECD, European Commission and national governments, 83% reported that they regularly brief the CEO or CFO about the issue.
“Increasing transparency readiness presents an opportunity not only to comply with new disclosure demands but also to proactively work to mitigate reputation risk,” said Jay Nibbe, EY’s global vice-chairman of tax.
To meet new demands, tax professionals may need to change the way they report and track information related to the taxes they pay, and re-align their IT systems.
“Getting prepared will require some additional investment in technology, data extraction capabilities, and new skills in people resources. It also involves increased awareness on how you think about your tax position, and how it could be perceived by a wide range of stakeholders, Nibbe said”