Businesses in the USA and Asia Pacific are lagging behind their counterparts in Europe and Latin America in terms of preparation for the OECD Base Erosion and Profit Shifting (BEPS) project recommendations, according to a survey by Thomson Reuters.
Thomson Reuters 2016 Global BEPS Readiness Survey Report found that 66% of its respondents globally are taking steps based on the BEPS recommendations, 22% are waiting for countries implementation, 7% are waiting for all action points in the project to be finalised, 3% are waiting for peers to make a move and another 3% are not doing
anything at all.
The survey found that responses varied greatly from one region to another. For example, 75% of respondents from companies based in Europe said they are proactively preparing for BEPS, up from 59% last year, compared to 71%in Latin America.
However in the USA and Asia Pacific only 64% and 40% respectively are proactively preparing for BEPS.
According to the survey, 50% of USA based respondents report spending two hours or less per week preparing for BEPS, a stark contrast to the UK where 28% of respondents spend more than 15 hours a week on the project. "This can be attributed to "the lack of clarity and guidance from American tax authorities," the survey reveals.
"Preparation for BEPS compliance is a daunting operational burden on multinational companies as they work to keep up with the growing list of new and changing global regulations," Brian Peccarelli, president of tax & accounting at Thomson Reuters, said. "While it is encouraging to see that more companies are preparing for BEPS, many corporations are still not doing enough to prepare for the compliance risks ahead."
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Asked which of the BEPS action represented the biggest change for their department, respondents overwhelmingly pointed to BEPS Action 13 on transfer pricing and country by country reporting (83%).
Other challenges include a lack of resources available as 48% of the companies responding have not yet provided more resources to help with BEPS implementation "which means they’ll be challenged to do more work with the same amount of staff, budget, outside support and technology," the report read.
Full survey can be accessed here: BEPS Readiness Report