The increasing tax burden is one of the most important concerns of CEOs, driving the adoption of proper internal controls and robust financial reporting processes to satisfy tax authorities, regulators and other stakeholders. At the same time, tax authorities worldwide are concerned with ensuring both increased compliance amongst taxpayers and that their fiscal policies are not overtaken by global business and economic developments. The international tax system is changing rapidly as a result of coordinated actions by governments and unilateral measures designed by individual countries, both intended to tackle concerns over base erosion and profit shifting (BEPS) and perceived international tax avoidance techniques of high-profile multinationals. PwC Sweden is a leading provider of tax services, combining a strong understanding of business and economic environments with specialist tax knowledge. In the following interview, PwC describes the main tax issues of the day.
Congratulations on making top spot in our Top 5 tax advisers in Europe report, can you tell us the main areas/sectors of growth your business has seen in the last 12 months?
Obviously, the BEPS project and the release of the final reports last year has had great impact on many businesses seeking our advice in various fields, like international taxation, transfer pricing, indirect taxes. There is an urgent need for businesses and other stakeholders to monitor the development and outcome from the BEPS project and legislative changes around the world that follows rapidly in different areas of taxation.
Can you tell us how BEPS has affected the tax landscape internationally and within Sweden?
Following the 5 October 2015 release of the BEPS final reports and as we enter the second phase of the OECD project (clarifications, implementation and monitoring), we have seen intense activity from governments and tax authorities, both from a behavioral and legislative perspective. This includes tax authorities in countries like the UK, Australia, China and the US, but also Sweden. Without doubt, the BEPS project has already had, and will continue to have, a profound impact for most tax payers.
Could you give us an example of where companies need to sharpen their position within the current tax changes?
In general, businesses should consider how the BEPS project recommendations will impact them and take appropriate action now. Time is of the essence, since notwithstanding the overall timeframe, implementation is in process and tax authorities are already taking a more aggressive stance. Within the context of the EU, the Commission will likely propose that the EU should go further on areas such as the general anti-abuse rule (GAAR), interest limitation rules and rules regarding hybrid mismatches.
Are there any other tax changes you think that the OECD may try to implement over the next year that would affect the current new rules?
The OECD has agreed a new framework (the BEPS Implementation Forum) that will allow all interested countries and jurisdictions to become part of an inclusive dialogue on an equal footing and to participate as BEPS Associates. This dialogue would cover clarification, implementation and monitoring. It would include, for developing countries, the development and provision of practical toolkits that address the top priority issues they have identified. The participant would have to commit to implementing the BEPS package of minimum standards. This is an unprecedented move by the OECD in the tax field, that will change the global tax landscape significantly.
For more information