What Are the Drivers of Tax Complexity for MNCs? Global Evidence

Intertax, Volume 46, Issue 8/9, pp. 654-675, 2018

22 Pages Posted: 24 Aug 2018 Last revised: 13 Feb 2019

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

Multiple version iconThere are 2 versions of this paper

Date Written: August 14, 2018

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, those triggered by the BEPS project–have given rise to the conjecture that complexity drivers may have changed, thus questioning the findings of prior studies. In this article, 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 consultants from 108 countries. Our results show that prior complexity drivers of the tax code are still important, with details and changes of tax regulations being the two most important complexity drivers. We also find evidence for new important 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 tax consultants’ responses, we develop a concept of tax complexity that is characterized by 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 Consultants

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 MNCs? Global Evidence (August 14, 2018). Intertax, Volume 46, Issue 8/9, pp. 654-675, 2018. Available at SSRN: https://ssrn.com/abstract=3230711

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, DE 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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