Companies Unprepared For Global Transformation Of Tax Systems

  • 11 Oct 2018 6:08 AM
  • Budapest Business Journal
Companies Unprepared For Global Transformation Of Tax Systems
Some 93% of corporate decision-makers are afraid that their company is not able to handle the sometimes conflicting views of national tax authorities, according to international research conducted by professional services firm EY among more than 1,700 company leaders.

The international tax system is about to undergo a transformation not seen for 100 years, according to the action plan of the Organisation for Economic Co-operation and Development (OECD), EYʼs research says. The OECD is aiming at countering the tendency at multinational companies to move their profits around to decrease their tax base.

Global tendencies point to a closer correlation between the tax administrations and systems of separate countries, with governments collecting and sharing more digital information with each other during tax controls than earlier. According to 89% of those surveyed, these conditions will need continuous adaptation in the future, with around 80% expecting tax risks to rise.

"Today, a locally taken financial or tax policy decision can result in an immediate international effect, which can influence the operation of companies," says Botond Rencz, EYʼs country manager for Hungary. "In order to spot and quickly react to the relevant changes in legislation, they need to have an appropriate advisory and technological background."

The vast majority of companies have taken steps to correct shortcomings in their operational model; however, 87% still believe there are not enough resources to follow the tax-related changes in rules, raising the companyʼs tax risks, and in turn the amount of tax that has to be paid, says the EY research.

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Budapest Business Journal

Hungary's largest and oldest source of business and financial news in English. Since 1992 it has presented essential information on Hungarian business life, including international analyses about the country. These days the BBJ newspaper is published every other week, while it releases daily business news online including premium paid content.