Making Tax Complexity Simpler at KPMG’s EMEA Tax Summit

Around the world the pace of change in tax policy, legislation and regulation is complicating the business environment in which tax professionals’ work. Commenting on these challenges, one-on-one video interviews with KPMG firms’ tax professionals, available at www.kpmg.com/taxviews seek to cut through this complexity and deliver practical ideas and approaches to help businesses address the key issues.

In Amsterdam today and yesterday, over 600 senior tax professionals from over 40 countries met at KPMG‘s Europe Middle East and Asia (EMEA) Tax Summit to discuss the increasing complexity and mounting challenges they are facing.

In a real-time poll, 55 percent of the tax professionals at the Summit said that to minimize tax complexity, tax administrations need to consult more with multinational tax directors to improve processes and joint working.

One way proposed in the EU to improve process includes the Common Consolidated Corporate Tax Base (CCCTB). CCCTB is a system of standardized rules for computing the tax base of a corporate group which has subsidiaries and/or permanent establishments in the EU. The CCCTB allows a group of companies to consolidate their profits and losses across the EU. This consolidated figure is then allocated by means of an apportionment formula to the relevant Member States. The Member States apply their own national tax rates to this allocation to calculate the tax liability.

When Summit tax professional were asked, as a corporate tax payer, if they would like to see the CCCTB implemented 36 percent had mixed views. Twenty-two percent agree and a further 18 percent strongly agree. Twelve percent either disagree or strongly agree. The poll also found that 29 percent strongly agree and 30 percent agree that they do not believe that the CCCTB will be implemented in any meaningful form before 2025. Twenty-seven percent disagreed.

“Complexity is a fact of life but we can all get a little smarter in how we deal with it,” says Wilbert Kannekens, KPMG’s Head of International Corporate Tax. “To get through the complexity companies need to have clearly articulated policies on their attitudes towards tax, they need to engage more and cooperate with authorities—and this goes both ways. At the end of the day they need accurate and transparent processes and controls which the stakeholders ultimately look at.”