ACCA: The principles and practices of taxation of companies explained in reboot to 2014’s initial guidance
Given the changes in the global economy in the last five years, ACCA today updates its report Global policy on taxation of companies: principles and practices – reiterating that in a globalised business environment, it’s undesirable and potentially counterproductive for any one country to go its own way, changing its tax laws unilaterally.
The report was originally published in 2014, to offer broad views about the issues being discussed around global taxation, with the aim of bringing structure and consistency to the debate.
Covering company taxation, rather than personal tax, this report also looks further ahead to how the tax landscape might unfold in the future. It also identifies features of a ‘good’ tax system and frames principles that ACCA aims to follow in its approach to policy on corporate tax matters.
Jason Piper, Policy lead, Tax and Business Law at ACCA says: ‘Our updated paper revisits the context within which the policy sits, as the global economy has moved on, but reiterates our policy positions, which we believe have stood the test of time.
‘As we approach 2020, we believe that coordinated efforts should be made internationally to ensure that tax systems keep pace with changes in the way that business is conducted, capturing the substance of economic activity in the calculation of liability to tax. ACCA supports and is directly involved in the efforts being made at G20 / OECD level to achieve this global reform.’
ACCA offers recommendations for companies, policymakers and those working as tax advisers, including:
For the company or corporate decision maker
ACCA believes companies should not, in principle, pursue aggressive tax avoidance – which means completely artificial arrangements that have no clear purpose other than to avoid tax by complicated schemes.
Companies have a commercial imperative, but ACCA believes that they also have a wider responsibility to be good corporate citizens. Companies need to consider the wider impacts of their tax policies and recognise that some approaches to tax will be seen by some people as unethical even if they are legal.
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