What are the Drivers of Tax Complexity for Multinational Corporations? Evidence from 108 Countries

Thomas Hoppe, Deborah Schanz, Susann Sturm, Caren Sureth-Sloane

Publication: Working/Discussion PaperWU Working Paper

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All over the world, firms and governments are increasingly concerned about the
rise in tax complexity. To manage it and develop effective simplification measures, detailed
information on the current drivers of complexity is required. However, research on this topic
is scarce. This is surprising as the latest developments - for example, triggered by the BEPS
project - give rise to the conjecture that complexity drivers may have changed, thus questioning
the findings of prior studies. In this paper, we shed light on this issue and provide a
global picture of the current drivers of tax complexity that multinational corporations face
based on a survey of 221 highly experienced tax practitioners from 108 countries. Our results
show that prior complexity drivers of the tax code are still relevant, with details and changes
of tax regulations being the two most influential complexity drivers. We also find evidence
for new relevant complexity drivers emerging from different areas of the tax framework, such
as inconsistent decisions among tax officers (tax audits) or retroactively applied tax law
amendments (tax enactment). Based on the responses of the practitioners, we develop a concept
of tax complexity that distinguishes two pillars, tax code and tax framework complexity,
and illustrates the various aspects that should be considered when assessing the complexity
of a country's tax system.
Original languageEnglish
Place of PublicationVienna
PublisherWU Vienna University of Economics and Business
Publication statusPublished - 1 Oct 2017

Publication series

NameWU International Taxation Research Paper Series

WU Working Paper Series

  • WU International Taxation Research Paper Series

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