Turkey, Brazil, Italy and Greece top the rank of most complex jurisdictions for accounting and tax compliance, according to the Financial Complexity Index 2017 compiled by the TMF Group, a business and investment services provider.
The index found that Italy is the most complex jurisdiction in Europe and is also the world's most complex jurisdiction for tax, while Greece has the world's most complex compliance environment. The index ranks 94 jurisdictions, grouping them within three key areas of challenge: regulation, knowledge and technology.
The Cayman Islands, along with Jersey, Hong Kong and the UAE, are considered to be the least complex places for compliance from an accounting and tax perspective.
Commenting on the findings, TMF Group’s Juraj Gerzeni said: “Despite measures to reduce taxation and align Italian accounting measures with international rules, the country still has some very specific requirements that contribute to its index ranking. Greece meanwhile has an extremely complex set of tax rules that directly impact local accounting. Organisations can find it very difficult to navigate the many accounting and tax requirements in Italy and Greece. In order to remain compliant and reach their full business potential in these markets, it’s necessary to work with in-country professionals that possess the required level of local expertise.”
The TMF Group outlined some of the issues that make tax and compliance difficult in Italy and Greece:
- Taxation in Italy is levied at national, regional and municipal levels, with numerous requirements for reports and returns to be submitted.
- The compliance burden has increased recently because Italy is addressing its problem of VAT evasion and is also seeking to comply with the Base erosion and profit-shifting (BEPS) initiative.
- Italy's tax system is complex and time-consuming for businesses.
- In Greece, there are several layers of VAT and no consistency in the application of the tax.
- Due to the volume and the complexity of Greek tax legislation, it is very common for a taxpayer to be in breach of some tax provision, even unintentionally.
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