Tax Morale II

Annex B. MNE Tax Certainty Survey Results

Table A B.1. Regional breakdown of responses from MNEs to question on the sources of tax uncertainty

		Africa		Asia		LAC		OECD
		Mean	Rank	Mean	Rank	Mean	Rank	Mean	Rank
Legal systems	Unclear, poorly drafted tax legislation	3.7	1	3.4	8	3.6	8	3.3	2
	Complexity in the tax legislation	3.2	16	3.2	12	3.7	3	3.2	3
	Frequent changes in the statutory tax system, regulations and guidance	3.1	19	3.0	20	3.5	15	3.2	4
	Retroactive changes to tax law	3.1	18	3.1	16	3.2	19	2.9	11
	Lack of statute of limitations	2.8	21	2.8	21	2.8	21	2.4	19
	Uncertainty about the ability to obtain withholding tax relief	3.7	2	3.4	6	3.5	13	2.7	16
Tax administration	Considerable bureaucracy to comply with tax legislation	3.6	4	3.6	2	3.9	1	3.3	1
	Unpredictable or inconsistent treatment by the tax authority	3.7	3	3.9	1	3.9	2	3.1	6
	Incentive structure of tax administration not aligned with a fair treatment of taxpayers	3.3	15	3.1	17	3.4	16	2.7	15
	General poor relationship with the tax authority	3.0	20	3.0	19	3.1	20	2.7	17
	Inability to achieve early certainty pro-actively through rulings or other similar mechanisms	3.4	9	3.4	4	3.5	11	2.9	9
	Corruption in the tax system	3.3	14	3.2	13	3.7	6	2.4	20
Dispute resolutions	Lengthy decision making of the courts, tribunals or other relevant bodies	3.4	8	3.3	10	3.7	4	3.1	5
	Unpredictable and inconsistent treatment by the courts	3.3	11	3.4	5	3.6	7	2.9	12
	Lack of published decisions clarifying interpretation	3.3	13	3.2	14	3.2	18	2.6	18
	Corruption in the adjudication system	3.3	12	3.1	18	3.5	12	2.3	21
International dimensions	Inconsistencies between tax authorities on their interpretations of international tax standards	3.6	5	3.6	3	3.7	5	3.1	7
	Conflicts between international standards	3.1	17	3.4	7	3.4	17	2.8	14
	Tax legislation not in line with the evolution of new business models	3.4	10	3.2	15	3.6	9	3.1	8
	Lack of understanding of international business	3.5	7	3.3	11	3.5	14	2.9	10
	Lack of expertise in tax administration on aspects of international taxation	3.5	6	3.3	9	3.5	10	2.9	13

Note: Results for the question, ‘Please identify in your experience how important each of the below factors has been in increasing the overall uncertainty on tax issues in the countries you have selected?’ The respondents could choose from a scale from 5 to 1, where 5 is extremely important and lower number indicate the factor is progressively less important. Not all respondents scored each factor, the number of responses per factor is recorded in the Obs column. The Rank column indicates the ranking (1-25) of each factor for each region.

The question represented in this table was asked separately for each country selected by the respondents, each respondent could select a maximum of 4 countries.

Source: OECD (2016) Tax certainty survey

Table A B.2. Regional breakdown of responses to question on which tools/approaches are most important to improving tax certainty

		Africa		Asia		LAC		OECD
		Mean	Rank	Mean	Rank	Mean	Rank	Mean	Rank
Tax Policy Design and Legislation	Changes in statutory tax system announced in advance	4.1	6	3.9	6	4.0	4	3.9	6
	Detailed guidance in tax regulations	4.3	1	4.0	3	4.0	6	4.0	4
	Reduced length and complexity of the tax legislation	3.8	9	3.6	13	3.9	8	3.8	8
	Reduced frequency of changes in the tax legislation	4.1	3	3.8	7	3.9	9	4.1	1
	Timely consultation with taxpayers when changes are introduced	4.0	7	3.6	12	3.9	11	3.7	10
	Domestic tax legislation in line with international taxation standards	4.1	5	4.1	2	4.1	2	3.9	5
	Reduction of bureaucracy to comply with tax legislation	4.1	4	3.7	9	4.1	3	4.0	2
	International consensus on general principles for tax certainty	3.7	12	3.9	5	3.7	13	3.7	13
	Streamlined and effective withholding tax relief reclaim systems	3.5	18	3.7	8	3.6	17	3.6	16
	The use of bright line rules	3.6	16	3.4	17	3.5	19	3.4	18
Tax Administration	Increased transparency from tax administrations in relation to their compliance approaches	3.7	13	3.7	10	4.0	5	3.8	7
	Increased transparency from tax administrations in relation to their risk assessment protocols	3.6	17	3.5	14	3.8	12	3.7	11
	Co-operative compliance programmes in a single jurisdiction	3.5	19	3.2	21	3.5	20	3.4	20
	The existence of simplified approaches for tax compliance e g safe harbours	3.9	8	3.5	16	3.7	14	3.5	17
	Advance pricing arrangement APA in a single jurisdiction	3.5	20	3.4	19	3.5	21	3.3	21
	Other rulings regimes	3.4	23	3.1	22	3.4	24	3.1	24
	Timely communication of tax authority during tax audits	3.7	14	3.4	18	3.6	15	3.6	14
	Capacity Building Programmes for tax authorities	3.4	22	3.0	24	3.4	22	3.1	23
	Efficient communication between taxpayers and administration e g by digital means	3.8	10	3.3	20	3.9	10	3.7	12
Dispute Resolution	Effective domestic dispute resolution regimes	4.3	2	4.1	1	4.2	1	4.0	3
	Mutual agreement procedure MAP	3.7	15	3.9	4	4.0	7	3.8	9
	Mandatory Binding Arbitration	3.8	11	3.6	11	3.6	18	3.6	15
Specific International Dimensions	Multilateral co-operative compliance programmes in collaboration with other jurisdictions	3.3	24	3.0	23	3.4	23	3.3	22
	Multilateral APAs in collaboration with other jurisdictions	3.4	21	3.5	15	3.6	16	3.4	19
	Multilateral audits in collaboration with other jurisdictions	3.1	25	2.7	25	3.2	25	3.0	25

Note: Results for the question, ‘Which of the following tools has enhanced or could enhance certainty in the tax system?’ The respondents could choose from a scale from 5 to 1, where 5 is the specific tool has increased or could increase certainty substantially, and lower numbers where the tool is progressively less important. Not all respondents scored each factor, the number of responses per factor is recorded in the Obs column. The Rank column indicates the ranking (1-21) of each factor for each region

Source: OECD (2016) Tax certainty survey