‘Don’t unduly hurt compliant taxpayers’
02 October 2015
Posted by: Author: Ingé Lamprecht
Author: Ingé Lamprecht (Moneyweb)
Concern that reforms around base erosion and profit shifting could be overly burdensome.
Companies that engage in aggressive tax planning strategies to move and shift profits must come to the fore, but reforms around base erosion and profit shifting (BEPS) must not "unduly hurt” compliant taxpayers, a tax expert has said.
Speaking at EY’s Tax Conference 2015, Shane Govender, head of tax at Vodacom, said as much as corporates want to be part of the BEPS initiative, there is a concern that it could be overly burdensome for compliant parties.
There is fear that the coming reforms will result in a "catch all” approach rather than a targeted one that will specifically focus on those multinationals that have done wrong, Govender said.
The Organisation for Economic Co-operation and Development (OECD) is scheduled to release its report on BEPS next week. It will provide guidance on international reforms to try and address this issue. The OECD defines BEPS as "tax planning strategies that exploit gaps and mismatches in tax rules to make profits ‘disappear’ for tax purposes or to shift profits to locations where there is little or no real activity but the taxes are low, resulting in little or no overall corporate tax being paid”.
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This article first appeared on moneyweb.co.za.