European Union: European Tax Survey - The Benefits Of Stability

Last Updated: 13 November 2013
Article by Deloitte Tax Group

Most Read Contributor in UK, August 2017



The external environment has rarely been more challenging for heads of tax. Governments and tax authorities traditionally seek to increase tax receipts in times of austerity. Public scrutiny has increased for many, particularly in Western Europe.

Looking inwards, changes within businesses are driving an evolution of the tax department. Tax compliance increasingly operates on a current (real‑time) basis. Tax specialists need to combine business and technical expertise to drive value for their organisations.

But how much has this really affected heads of tax? What keeps them awake at night? Which jurisdictions are perceived as the most challenging and where in Europe it is seemingly becoming easier to do business?

In order to help understand this fast-changing landscape, Deloitte undertakes an annual survey to track trends as viewed by heads of tax.

Almost 1,000 companies across Europe participated in the Deloitte Tax Survey in 2013. The responses were often surprisingly unanimous for organisations that vary in size and structure, operating in different economies.

Headline findings

  • The Netherlands and the UK were seen as the most favourable of the large jurisdictions, from a tax perspective, for inward investment. Both had worked hard to become more attractive to multinational companies, and this seemed to be working.
  • Italy and Russia were viewed as the most challenging of the large jurisdictions, due to rapid legislative changes, ambiguity and different views of how tax positions should be interpreted.
  • Above all, heads of tax wanted stable tax legislation. The biggest issue many cited was that already complex tax systems were being further complicated by rafts of new laws. Aside from the burden of keeping up with the changes and educating their teams, this was the main cause of tax uncertainty – frequent law change was also the thing that most would reduce in order to make their own countries more competitive.
  • 75% of respondents had been subject to a tax audit in the past three years. More than a third would be likely to litigate if they felt that a tax investigation was unjust, either in terms of the process or the outcome.
  • There was a clear divide with regard to the level of public debate around tax. The west of Europe – in particular Luxembourg, Switzerland, the UK, and the Netherlands – were facing media scrutiny, pressure from special interest groups and heated discussion around what constitutes a just and fair tax system. In the first three, this scrutiny was focused on multinationals; in the Netherlands the issue was mainly directed at the government. Eastern European countries, such as the Czech Republic and Hungary, were not recognising tax as a major public issue.
  • Contrary to some public perceptions, the measure of success for heads of tax was not lowering the effective tax rate (or ETR), but strongly compliance‑focused: filing of returns in a timely manner and working with the business to ensure there are no nasty surprises around the corner.
  • Heads of tax were also changing where they spend their time as they become more integrated with the business and in direct discussion with its operational parts. Tax technical roles may form part of the team, but the communication skills and focus needed by the head of tax these days are much broader.
  • Respondents appeared to be stretched. Many had demanding roles but relatively small teams. Most (55%) had global or regional responsibilities and yet were operating with teams of fewer than three people.
  • Shared Service Centres (SSCs) are available to support over half of those who responded. Two thirds used SSCs for some or all of their tax compliance work.


Most favourable jurisdictions from a tax system perspective

Respondents were asked to rate the major European economies – France, Germany, Italy, the Netherlands, Russia, Spain and the UK – in terms of which was deemed to be the most favourable from a tax system perspective. The reason for restricting views to the major economies was to recognise that many organisations do business in those economies and, therefore, their tax regimes affect many multinational groups.

The most favourable major economy to operate in was the Netherlands, closely followed by the UK.

The Netherlands was cited as having an easy and 'professional' tax system. It was seen as predictable, easy to contact the tax authorities and to receive a ruling within a few weeks. Respondents continually referred to the simplicity of its tax system and the ease of dealing with authorities.

For the UK, the tax officials were often praised as being helpful, and many of the respondents viewed it as operating international best practice. The tax authorities were viewed as pragmatic, clear and open.

Most favourable smaller jurisdictions from a tax system perspective

Respondents were then asked to select from the smaller European economies whether there was another country more favourable than the major economy already rated. Luxembourg and Switzerland were viewed as most favourable by the highest number of respondents, followed by Belgium and Ireland.

47% of respondents from the Netherlands picked their own country as the easiest to operate in and only 43% had experienced a tax authority audit in the Netherlands in the past three years. 58% of UK respondents picked their own country as the most easy to operate in, even though 73% had experienced a tax authority audit.

Most challenging large jurisdictions from a tax system perspective

Respondents were also asked to consider which of the major European economies were the most challenging from a tax system perspective. Russia was viewed as the most difficult of the seven largest European economies in which to operate. The main reasons stated were uncertainty and complexity. Comments also included that rules appeared opaque and arbitrary, or difficult to understand.

Italy was also viewed as challenging. Comments from respondents pointed out that the Italian tax system – being subject to frequent changes in tax law – suffered from different interpretations over time. This, combined with a very general anti‑abuse rule and criminal sanctions for tax issues, were the main reasons for its less favourable ranking.

Finally, respondents were asked whether there was a smaller economy that was more challenging than any of the large economies. Here, many respondents stuck with their chosen large economy as the most challenging, particularly Russia. However Greece, Portugal, Poland and Hungary also featured, in that order.

Comments on tax regimes

The reasons given for finding tax regimes favourable were strikingly similar – transparency, certainty, a well‑designed tax system, and the possibility of forming sensible working relationships with the tax authorities.

There was also widespread consensus over why jurisdictions can be challenging from a tax perspective. Respondents did not like uncertainty, legislative change, and tax authorities that are unable or unwilling to find solutions to tax issues created by commercially motivated transactions. Russia, specifically, was cited as having a 'very different tax regime from the rest of Europe' that 'did not mesh well' with other commonly accepted structures for tax systems internationally.

Interestingly, few respondents referred to tax rates in their answers, which suggests that jurisdictions can afford to have relatively high tax rates, provided that their tax systems are uncomplicated and flexible.

Respondents were generally more critical of their own jurisdictions than of foreign jurisdictions. A third of French respondents picked their own country as most challenging versus only 15% overall. 37% of German respondents selected their own country versus 17% overall. This may reflect that, for many respondents, their local jurisdiction is where their group's regional or worldwide headquarters are based, and therefore their local tax affairs are likely to be more complex (for example, due to the need to navigate debt financing complexities or controlled foreign company compliance and reporting obligations) than those of their (often relatively straightforward) subsidiary operations.

To read this Survey in full, please click here.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.