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Technology, media & telecommunications Home
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?
- Global survey finds little impact on business from OECD BEPS tax plan
78% of businesses say they have not changed their businesses approach to taxation.
- Nearly one year after release of OECD Base Erosion and Profit Shifting (BEPS) Action Plan, 78% of businesses have not changed their approach to taxes
- This despite more than 80 countries having agreed to adopt at least the minimum elements of the BEPS Action Plan
- Biggest concerns for businesses from the BEPS Action Plan are the additional administrative burdens and cyber security of information shared with local and foreign governments;
A global survey of 2,600 businesses in 36 countries finds little impact from the OECD BEPS programme which was finalised last October, as 78% of businesses say they have not changed their businesses approach to taxation, despite more than 80 countries having agreed to adopt at least the minimum elements of the BEPS Action Plan.
The lack of impact is even greater in the G7 (83%), with 89% of US businesses and 86% of UK businesses saying that BEPS has had little impact on their tax planning. According to the businesses surveyed, BEPS has had the greatest impact on business tax planning in the countries of Indonesia (35%), Nigeria (38%) and India (36%).
As part of the BEPS plan, businesses are being asked to provide corporate tax information to local and international authorities and the two greatest concerns with the practice is the additional administrative burden it creates (25%), followed by cyber security concerns (15%). Additional administrative burden was cited by 35% of businesses in UK and by 32% in the US.
“It is fascinating that after the initial excitement around BEPS, and its potentially game changing elements, so few in the survey have taken active steps to change what they are doing,” said Francesca Lagerberg, Global leader - tax services at Grant Thornton International Ltd.
“The reasons for this are likely to be many. A number of companies will be reluctant to be the first mover in this area and may be looking to see what others are doing in their industry or region. Governments haven’t yet explained how or even if they will implement BEPS in some countries, so that leads to business caution.”
“Equally, business leaders prefer the black and white to the grey on tax issues, so businesses would undoubtedly benefit from more guidance on what they should do next. Many will have been bitten by retrospective legislation or rule changes on tax in recent years and will be nervous about action before the ground rules are clear. The recent EU action against Apple and its agreements with Ireland does not help make these tax issues any clearer for businesses.”