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Introducing global trends in tax policy

The competitive struggle between states is pushing down tax rates. On the other hand, several countries protect their own territorial revenues. We bring you an overview of the ten most important trends that run the world of tax policy:

Reducing rates, broadening tax bases

  • International tax competition is pushing tax rates even lower. How does one prevent a rapid decline in tax revenues? Compensate for reducing rates by extending the tax base.

Moving from direct taxes to indirect taxes

  • Excise taxes are not as discouraging as direct taxes when it comes to the working individual. It is possible to achieve higher tax revenues while maintaining the economic activity of citizens, which supports economic growth.

Computerization of tax administration

  • Electronic tax returns, online payments, e-mail communication – all reduce costs to the taxpayer and public administration. Some states face problems with the implementation of these electronic tools.

The emphasis on cooperation in the fight against tax optimization, implementation of new rules (so-called GAAR)

  • During the period of fiscal consolidation more states begin to feel a loss following international transactions, which often take place only in order to achieve tax benefits.

Focusing on pro-growth measures to stimulate growth (R&D support, export)

Tax inspections and audits based on risk analysis results

  • Less checks, but more targeted and therefore more efficient.

Transparency and disclosure

  • Requirements are increasing sharply due to the need to defend their own tax revenues.

Stricter rules on transfer pricing pressure, on offshore activities of taxpayers

Greater emphasis on the rights of taxpayers

Environmental taxes

Source: PwC Czech Republic; Tax, Legal & Business News 6/2012

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