1 in 4 companies say they won’t meet BEPS deadline 

One quarter of corporate executives, tax and transfer pricing directors have said their companies won’t meet the Base Erosion and Profit shifting deadlines, according to a Thomson Reuters survey.

The BEPS project has been championed by the Organisation for Economic Co-operation and Development (OECD) and leaders of G20 countries in an effort to close tax loopholes that have enabled international companies to shift profits to lower-tax jurisdictions.

Of the countries that have implemented anti-avoidance measures, the UK is top of the list when it comes to countries that are causing most concern, followed by Australia, China then the USA, the survey has revealed.

Several other countries — including Spain, Mexico, the Netherlands, Poland, and South have also proposed new corporate tax rules reflecting the tenets of the BEPS Action Plan.

The OECD unveiled the final set of BEPS recommendations on Monday however the ‘final package’ will be presented to G20 finance ministers in Lima, Peru, on 8 October.

Yet research already shows varying levels of political and commercial commitment in implementing the non-compulsive measures, with half of the 180 multinationals Thomson Reuters surveyed saying they have not prepared for the “complex” BEPS requirements.

But the majority (59%) of European respondents said they are preparing for BEPS, in comparison to 48% of their peers in Asia Pacific and the Americas.

The report found that more than 78% of respondents will devote most time to the Transfer Pricing and Country by Country Reporting elements of the BEPS Action plan, as this element of the action plan is their greatest concern.

Companies with global revenues of €750 million (or the equivalent in local currency) need to begin submitting their country by country analysis to tax authorities by 1 January 2017. This should include revenue, profits, taxes paid, employment, capital, tangible assets and more, according to Thomson Reuters president of tax and accounting Brian Peccarelli.

“Corporate concern over this requirement is well-founded: approximately two-thirds of respondents said their IT systems do not integrate with their transfer pricing documentation,” Peccareli said adding that technology should be central focus for international companies, to ensure consistency between their transfer pricing policy, implementation, and documentation.

Source: The Accountant – 1 in 4 companies say they won’t meet BEPS deadline

---