This year’s award for the country with The Most Complex Tax and Accounting Environment goes to…
Before we get there, it’s important to note that tax complexity, while crucial, only represents one dimension of a country’s global financial competitiveness. Compliance demands imposed by accounting rules and regulations are an important measure, too, although these challenges often receive less attention. TMF Group, a global business and administrative services provider, has identified and assessed an interesting collection of factors in compiling its Financial Complexity Index 2017.
The firm asked its in-house experts around the world to consider the relative complexity of tax and accounting rules in their regions – as well as several other indicators, such as data-storage requirements and the risks associated with non-compliance.
The list of the easiest jurisdictions holds few surprises, featuring places like the United Arab Emirates, the British Virgin Islands, and – easiest of all – the Cayman Islands. But the most-complex rankings include some eye-openers: a handful of major EU players like Italy and Belgium, as well as all of the BRIC nations except Russia. The most complex jurisdiction of all? Turkey.
I won’t give away the ranking of the United States here, although I will report a surprising tidbit: tax and accounting along with tax compliance rates are more complex in the US than in Myanmar. That helps explain growing calls for radical simplification of the U.S. tax code, including a plan to reduce income tax returns to the size of a (large) postcard.
But, hey, there’s at least one bright spot for companies wrestling with domestic tax compliance complexities: The U.S. is not quite as challenging as Bulgaria.
Please remember that the Tax Matters provides information for educational purposes, not specific tax or legal advice. Always consult a qualified tax or legal advisor before taking any action based on this information.