UK in top 20 for simplest compliance regime

The company, a global provider of business and compliance services, has produced a financial complexity index, ranking 94 jurisdictions across Europe, the Middle East, Africa, Asia Pacific and the Americas.

TMF Group says it used four weighted complexity parameters, considering the accounting and tax rules and regulations in different jurisdictions, and risks associated with non-compliance. Under the scoring system, 1 is the most complex through to 94 the least complex.

The Cayman Islands took bottom position as the least complex place for compliance from an accounting and tax perspective. The UK’s score of 78 puts it in the top 20, above the US (ranked at 70) and Ireland (58), but still a more complex jurisdiction than Switzerland (87).

TMF Group says the five least complex jurisdictions have simplified reporting requirements and beneficial tax rates to encourage investment: Jersey (90), Hong Kong (91), the UAE (92), BVI (93) and the Cayman Islands (94).

Overall, Turkey is the most complex jurisdiction in which to stay financially compliant largely due to the requirement to report in both Turkish language and currency, and the extremely high number of tax articles, although this is reducing. Brazil is in second place, followed by Italy and then Greece, with Vietnam in fifth place.

In its analysis TMF Group says both Italy and Greece have very localised complexities. In Italy taxes are levied at a national, regional and municipal level, while in Greece taxes are divided into three categories: income, property and consumption tax.

South and Central America has five jurisdictions in the top 15 most complex: Brazil, Colombia, Argentina, Bolivia and Mexico. This is largely due to the common practice of levying three layers of taxation, at federal, state and municipal level.

Asia Pacific has three jurisdictions in the top 10: Vietnam, China and India. Complexity around invoicing, filing and the conducting of audits is high with very specific documentation and processes applied.

Deborah Williams, TMF Group’s global leader of service lines, said: ‘Our findings show that financial complexity can be grouped within three key areas of challenge: regulation, knowledge and technology.

‘Multiple layers of taxation and the rate of legislative change in some jurisdictions requires increased effort to meet compliance requirements.

‘As more and more jurisdictions automate and digitise their information storage and reporting requirements, it’s important for organisations to increase their compliance, transparency and flexibility so they can be operationally efficient and reach their full business potential.’

TMF Group’s Financial Complexity Index 2017 is here.

News source: CCH Daily

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