What are the Drivers of Tax Complexity for Multinational Corporations? Evidence from 108 Countries

28 Pages Posted: 3 Oct 2017 Last revised: 14 Aug 2018

See all articles by Thomas Hoppe

Thomas Hoppe

University of Paderborn

Deborah Schanz

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management)

Susann Sturm

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management)

Caren Sureth-Sloane

University of Paderborn; Vienna University of Economics and Business

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Date Written: October 1, 2017

Abstract

All over the world, firms and governments are increasingly concerned about the rise in tax complexity. To manage it and develop effective simplification measures, detailed information on the current drivers of complexity is required. However, research on this topic is scarce. This is surprising as the latest developments—for example, triggered by the BEPS project—give rise to the conjecture that complexity drivers may have changed, thus questioning the findings of prior studies. In this paper, we shed light on this issue and provide a global picture of the current drivers of tax complexity that multinational corporations face based on a survey of 221 highly experienced tax practitioners from 108 countries. Our results show that prior complexity drivers of the tax code are still relevant, with details and changes of tax regulations being the two most influential complexity drivers. We also find evidence for new relevant complexity drivers emerging from different areas of the tax framework, such as inconsistent decisions among tax officers (tax audits) or retroactively applied tax law amendments (tax enactment). Based on the responses of the practitioners, we develop a concept of tax complexity that distinguishes two pillars, tax code and tax framework complexity, and illustrates the various aspects that should be considered when assessing the complexity of a country’s tax system.

Keywords: Complexity Drivers, International Comparison, Survey, Tax Complexity, Tax Practitioners

JEL Classification: H20, H25, C83, O57

Suggested Citation

Hoppe, Thomas and Schanz, Deborah and Sturm, Susann and Sureth-Sloane, Caren, What are the Drivers of Tax Complexity for Multinational Corporations? Evidence from 108 Countries (October 1, 2017). WU International Taxation Research Paper Series No. 2017-12. Available at SSRN: https://ssrn.com/abstract=3046546 or http://dx.doi.org/10.2139/ssrn.3046546

Thomas Hoppe

University of Paderborn ( email )

Warburger Str. 100
Paderborn, D-33098
Germany

Deborah Schanz

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management) ( email )

Ludwigstr. 28 RG IV
Munich, Bavaria 80539
Germany
+49 (0) 89 / 2180 - 3681 (Phone)
+49 (0) 89 / 2180 - 3874 (Fax)

HOME PAGE: http://www.en.steuern.bwl.uni-muenchen.de/index.html

Susann Sturm

Ludwig Maximilian University of Munich - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, 80539
Germany

Caren Sureth-Sloane (Contact Author)

University of Paderborn ( email )

Warburger Str. 100
Paderborn, 33098
Germany

Vienna University of Economics and Business ( email )

Welthandelsplatz 1
Vienna, Wien 1020
Austria

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