Outlook for global tax policy in 2017

This guide summarizes countries’ tax policy outlook for 2017. Use the map or the menu to see the guide’s information for a country.

This guide summarizes countries’ tax policy outlook for 2017. Use the menu below to see the guide’s information for a country.

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Global tax reforms and sustained weak economic growth continue to disrupt the competitive landscape in tax across the globe, driving countries to introduce new business incentives in order to compete. This is according to EY’s Outlook for global tax policy in 2017, which combines insights and forecasts from EY tax policy professionals in 50 jurisdictions across the globe.

While the long-term trend for countries to pursue a low-rate, broad-base business tax strategy remains strong in 2017, implementation of the G20/OECD’s Base Erosion and Profit Shifting (BEPS) recommendations and draft legislation introduced by the European Commission are now compelling governments to seek alternative means of immediate change to remain competitive. The report finds that broader business incentives designed to stimulate or sustain investment will receive increased government investment in 30% of countries surveyed, while 22% foresee more generous research and development (R&D) incentives in the year ahead.

Corporate income tax rates set to attract growth

Countries are further seeking to stimulate economic activity and to attract foreign direct investment by maintaining or lowering corporate tax rates. Nine of the 50 countries surveyed confirm that laws are now in place that will drive lower corporate income tax (CIT) rates this year, with eight of those countries based in Europe (versus just three last year), indicating that the epicentre of BEPS has moved into Europe and that countries in the region are reducing rates faster than elsewhere.

The majority of respondents (80%) report no anticipated or known change to their national headline CIT rate in 2017, while only one outlying country – Chile – forecasts a known or anticipated rate increase.

Global tax reform is driving an increased tax burden

With countries continuing to respond to BEPS-related transparency and disclosure requirements (Action 13), the report finds that increasing tax enforcement and new transfer pricing rules were the main sources of tax burden-increasing changes among respondents (both 46% respectively).

The number of countries forecasting an increasing business tax burden continues to rise, with 22% expecting an overall increase in the CIT burden in 2017 (versus 18% in 2016).

The report also finds that nine jurisdictions forecast a higher indirect tax burden, as the worldwide spread of value added tax (VAT) and Goods and Services Tax (GST) continues and technology is adopted more widely by tax administrations.