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International Business Report (IBR)
TMT outlook: Can tech spend buoyancy keep the industry airborne?
Uncertainty is mounting for technology, media and telecommunications (TMT) businesses amidst a turbulent economic and political backdrop, according to the latest research from Grant Thornton. But with businesses in other industries increasingly looking to new technologies as the path to transformation, this is also a time of opportunity. So how can the TMT industry ride out the turbulence and thrive?
New figures from Grant Thornton
New figures from Grant Thornton reveal a striking split in the approach to tax planning between businesses in the Nordic region and those elsewhere around the world – particularly in comparison to southern Europe. Despite corporation tax rates being pretty similar across the two regions, Nordic business leaders are much more likely to accept the prevailing rate while peers to the south are more likely to be looking to reduce their tax bills.
Asked what their top priorities are in 2014, just 11% of businesses in the Nordic region cited reducing their tax bill, compared to 35% globally and 48% in southern European economies. The proportion of businesses in Sweden who said reducing their tax bill is a major priority this year was just 5%. The responses in Denmark (8%), Finland (8%) and Norway (20%) were similarly low.
By contrast, 37% of business leaders in Spain said reducing their tax bill was a top priority for 2014. In troubled France the figure was also 37%, and in Greece (52%) and Italy (54%) the response was even higher. The G7 average was 37%.
Francesca Lagerberg, global leader of tax at Grant Thornton, commented:
“There are certainly some lessons to be learned here. Given the results, you might assume that corporation tax in southern Europe is much higher than in the Nordics, hence the relative urgency to bring tax bills down. But they’re actually pretty similar. The Nordics have yet to suffer a major corporation tax scandal, but these figures suggest businesses in the region are setting commendably high standards at a time when corporate responsibility and paying tax is high on the agenda – not least at Davos recently.
“The OECD is working hard to bring global tax legislation into the digital age but in the meantime the onus is on governments to help companies make these decisions easier by encouraging transparency from business and providing clarity around legislation."
Peter Bodin, CEO of Grant Thornton Sweden, commented:
“Many Nordic businesses are instilled with a strong sense of corporate responsibility and ethics. Although certain companies are adopting a more aggressive pursuit of lower tax, on the whole paying tax is expected and businesses feel a sense of doing this. As individuals, Scandinavians are used to paying tax and this creates a mindset which translates into the corporate world.”
Geir Peter Hole, tax partner at Grant Thornton Norway, said:
“From a Norwegian perspective, tax compliance is not just a point of principle. Anti-avoidance rules are well anchored in Norwegian tax legislation and tax practice. This, coupled with a quite common view of aggressive Norwegian tax authorities, means that tax planning with the aim of reducing tax bills will often be seen as a high risk strategy and therefore one to be avoided.”
Notes to editors
The Grant Thornton International Business Report (IBR) provides insight into the views and expectations of more than 12,500 businesses per year across 45 economies. This unique survey draws upon 22 years of trend data for most European participants and 11 years for many non-European economies. For more information, please visit: www.internationalbusinessreport.com
Data collection
Data collection is managed by Grant Thornton International's core research partner -Experian. Questionnaires are translated into local languages with each participating country having the option to ask a small number of country specific questions in addition to the core questionnaire. Fieldwork is undertaken on a quarterly basis. The research is carried out primarily by telephone.
Sample
IBR is a survey of both listed and privately held businesses. The data for this release are drawn from interviews with 3,500 chief executive officers, managing directors, chairmen or other senior executives from all industry sectors conducted between November and December 2013.
