The global tax landscape is going through a period of fundamental change. Governments are now rethinking how taxes are levied. These changes have been triggered by the rapid spread of technology, new supply chains, debt pressures, and an increased scrutiny of multinational tax practices.
More than ever, tax is a top priority for businesses, as sweeping changes, brought in through the Organisation for Economic Cooperation and Development’s (OECD’s) Base Erosion and Profit Shifting (BEPS) recommendations, transform the way they operate.
Whilst corporate tax avoidance continues to grab headlines, some of the biggest reforms are in fact occurring within indirect tax. This year, two of the world’s most populous countries – China and India – are expected to transform their indirect tax systems.
China is set to complete the final stage of its Value Added Tax (VAT) reform, whilst India is expected to introduce its long-awaited comprehensive Goods and Services Tax (GST) system.
Just next door, Bangladesh has plans to implement a new VAT in July. The Middle East are also expecting momentous changes. In a move to generate additional revenue and diversify the economy, the Gulf Cooperation Council (GCC) countries – Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Bahrain, and Oman – are expected to levy VAT from 2018.
What are the primary reasons behind the global shift to indirect tax? Talk to your local firm about how Grant Thornton can help your organisation prepare for the shift to indirect taxation.