Already, 61% of respondents have been affected by BEPS-driven legislation in at least one country where they operate. While concerned about several areas of the BEPS recommendations, 33% of respondents expect country-by-country reporting to have the greatest impact. Most respondents (73%) have already begun to analyze what country-by-country reporting will mean to their company, a significant increase over last year (47%).Transfer pricing had been the key concern in 2014 and remains the second most prevalent concern this year. In addition, one third (33%) of respondents already saw tax authorities raising audit issues that reflect BEPS areas, with 64% identifying transfer pricing as the most prevalent BEPS-related audit issue.
They anticipate making changes, particularly to transfer pricing documentation (56%) and methodology (35%), as well as financing structures (35%). In addition, 64% said they are more likely to consider using the APA process to manage risk and obtain certainty.
Other findings of the survey include:
- 83% of respondents expect upward pressure on their global tax rate within the next few years, 65% of whom see tax law changes as a primary contributor
- 83% also believe the evolving taxation of the digital economy is important to the future of overall worldwide taxation, affecting primarily nexus, permanent establishment and treaty evolution
- 27% are contemplating new operating models for digital transactions
- 66% anticipate a significant corporate transaction within the next 12 months, with 81% of those respondents expecting an acquisition
- Respondents cited India (30%), the European Union (25%) and North America (21%) as the most contentious regions for transfer pricing audits.