THORNTON BEPS impact: Indian companies tweak tax planning approach

By: | Published: September 29, 2016 5:18 PM

Around 35 per cent of businesses in India have changed their tax approach following the OECD Base Erosion and Profit Shifting (BEPS) tax plan, higher than the global average.

Around 35 per cent of businesses in India have changed their tax approach following the OECD Base Erosion and Profit Shifting (BEPS) tax plan, higher than the global average.Around 35 per cent of businesses in India have changed their tax approach following the OECD Base Erosion and Profit Shifting (BEPS) tax plan, higher than the global average.

Around 35 per cent of businesses in India have changed their tax approach following the OECD Base Erosion and Profit Shifting (BEPS) tax plan, higher than the global average, says a report.

The Grant Thornton’s recently conducted global survey of 2,600 businesses in 36 countries, found little impact of the OECD BEPS programme, which was finalised last October.

As part of the BEPS plan, businesses are being asked to provide corporate tax information to local and international authorities.

Globally, around 78 per cent of the surveyed businesses said that 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.

However, as per the survey, India is one of the countries where BEPS has had the greatest impact on business tax planning.

“The survey results indicate that while BEPS has not yet captured the discussion boards in management meetings in most parts of the world, in India, it is being discussed and companies are taking note of this international tax reform,” Arun Chhabra, Director, Grant Thornton Advisory said.

Around 35 per cent of businesses surveyed in the country said that they have changed their tax approach following the new guidelines. A few other countries witnessing the BEPS impact include Nigeria (38 per cent) and Indonesia (35 per cent).

“The result is not really surprising when viewed in the context of the anti-tax avoidance initiatives and tax reforms being taken by the Indian government,” Chhabra said.

The survey reveals that the two biggest concerns for Indian businesses post the BEPS implementation, is the administrative burden of collating the tax information and how the information would be interpreted by the authorities.

“BEPS can potentially impact the business environment in many countries and Indian multinationals are rightly factoring it in their business tax planning,” Chhabra said.

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