The Netherlands and the UK are the most attractive European economies to operate in from a tax perspective, according to a report by Deloitte.
More than 800 European tax professionals were surveyed for the report, which found that the Netherlands was the most appealing economy to operate in during 2013, followed closely by the UK.
Respondents commended the Dutch tax authorities for their responsiveness, ease of communication, accessibility of information, and clear and simple procedures, which were thought to favour entrepreneurs and economic growth.
The UK was praised for its competitive tax regime and ease of compliance.
The majority of respondents (54%) argued that one of the main challenges they face is a high degree of tax uncertainty in their own country. In particular, they referred to frequent changes to legislation (39%), ambiguity, weakness and reversals in the tax authorities’ doctrine of publicly available guidance (28%), and the long duration of tax disputes (12%), as the main challenges.
When asked whether the Organisation for Economic Cooperation and Development’s base erosion and profit shifting project was important to their tax department, just over half (51%) of respondents said it was important or very important.
More than half (56%) of respondents thought that levels of discussion and scrutiny around corporate tax strategy have increased, especially from shareholders. Yet the majority of respondents have not been asked by external (77%) or internal stakeholders (60%) to justify their tax strategy.
Respondents in the west of Europe were more inclined to think that tax is in the spotlight than respondents in the east of Europe. In Western Europe, 81% of UK respondents, 80% of French respondents and 74% of Dutch respondents thought that tax is under more scrutiny now. In contrast, tax is not on the agenda in Eastern Europe and Southern Europe. For example, 86% of Bulgarian tax directors did not think tax was any more of an issue now, than last year.
Commenting on the report, James Wright, tax partner at Deloitte, said: “Tax professionals want stable tax legislation, as they believe it will have the most positive impact on their country’s commercial competitiveness. They do not like uncertainty and they suggest simplifying the tax system would also make their own countries more competitive.”