Tax risk and controversy have never been higher on the corporate agenda. Governments around the world are battling to control their public finances. They are working hard to raise tax revenues, close loopholes and share information that will lead to better compliance. To find out more, visit: http://tmagazine.ey.com/issue/issue-10/

1. Tax risk
on the rise
£32,000,000,000
The amount of tax that went uncollected in the UK in 2010–11, according to
HM Revenue & Customs (HMRC), slightly up from £31b the year before
US$385b
The amount in US$ expected to be
recovered by Foreign Account Tax
Compliance Act (FATCA) over
10 years; the cost of FATCA
compliance for some large firms is
estimated at between US$70m
and US$100m
207
The number of General Anti–Abuse
Rule (GAAR) cases concluded in 2011,
as reported by the Chinese tax
authority, which resulted in around
US$24b in taxes being collected
New sources of tax risk
Tax administrations around
the world become more
rigorous
92%
!
Increased pace of legislative
change
Growing disclosure
and transparency requirements
The percentage of China-based
companies that have seen
a rise in the number
or rigorousness of tax audits
in the last three years
?
Expansion in emerging markets
A new breed of tax activism
has emerged
200% £40m
The maximum penalty, as a percentage
of tax underpaid, that Italy has
the power to levy on companies
falling foul of anti-avoidance legislation
The amount one UK corporation
was forced to pay in back taxes
and penalties for failing to accurately
report home-paid income
The percentage of India-based
companies that have
experienced stricter disclosure
and transparency requirements
in the last two years
US$350b
The latest estimate by the
Internal Revenue Service of
the amount of tax that is
underpaid in the United States
85%
800+
The number of bilateral tax information
exchange agreements that have been
signed since 2009 as part of the
Organisation for Economic Co–operation
and Development (OECD)’s Global
Forum on Transparency and Exchange
of Information for Tax Purposes
Companies experiencing
an increase in the number
or rigorousness of tax
audits in the last two years
73%
57
All companies
75
Tax directors of US$5b+ revenues
The percentage of business
leaders who think that
operating in emerging
markets significantly
increases their levels of tax
and tax controversy risk
57
US$3b+ revenues
69
Americas
60
BRICS
52
EMEIA
48
Asia
Source: HSBC Expat Explorer 2011, Atlas Corporate Relocation Survey 2011, Ernst & Young Global Mobility Effectiveness
Survey 2011, EIU ; Up or out: Next moves for the modern expatriate 2010; graphic: Käthi Dübi
Tax audits and public debt
Even if all the tax associated with open cases were to be collected by
the tax authorities, this only represents a small portion of public debt
Country
Tax claimed in cases
Percentage of
not finalized at year-end* public debt
Canada
Indonesia
Korea
US
Mexico
New Zealand
Czech Republic
C$14,780m
IDR16,134,468m
2,900,129m
US$64,623m
MEX$25,677m
NZ$163m
K�2,538m
1.16%
1.0%
0.81%
0.52%
0.48%
0.33%
0.20%
*2009
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