The introduction of the OECD’s Base Erosion and Profit Sharing (BEPS) Action Plan has had limited negative impact on Scottish businesses, according to new research from Grant Thornton.
The strategy was created almost a year ago in an attempt to tackle multinational tax avoidance and create greater harmonisation between countries. More than 80 nations, including the United Kingdom, agreed to adopt at least the minimum elements of the plan, prompting fears that global businesses would face the burden of increased costs, bureaucracy and cross-border cyber security threats.
But, a global survey of more than 2,600 businesses in countries around the world, including Scotland, has found 78% of companies have made no changes to their tax planning, while only 25% continue to have concerns about increased red tape and 15% worry about data breaches due to information being shared across borders.
Senior Tax Manager at Grant Thornton in Scotland, Gail Gibson, said:
“The BEPS Action Plan is a game changer with far reaching consequences for the way international companies manage their cross-border activities. The nature of Scotland’s economy means that many Scottish firms who are doing business overseas are affected by the changes. But, despite this seismic shift, our survey reveals that very few have taken active steps to review their readiness for the changes.
“Our findings suggest that a lot of companies are cautiously watching and waiting, reluctant to be the first movers in this area and pausing to see what others plan to do. There’s also the added concern that the plan could become increasingly complex as different countries cherry pick different aspects and create further layers of taxation bureaucracy rather than simplifying existing structures. As the rollout and individual adoptions become clearer, companies will need to stay on top of BEPS and be ready to respond accordingly to avoid potentially significant consequences.”