What creates tax uncertainty? Evidence from three phases of a cross-country survey
This paper presents the results of three waves of a survey of large multinational businesses on the sources and effects of uncertainty about business taxation. The results indicate that tax uncertainty plays an important role in investment and location decisions. There is huge variation in tax uncertainty amongst countries, suggesting an important role for country-specific factors in creating uncertainty. The most important sources of uncertainty in high income countries reflect the tax system itself: complexity and frequent changes to the statutory system. By contrast, the most important sources in lower, and upper,middle income countries reflect problems of administration: for example, unpredictable or inconsistent treatment by tax authorities and courts, and an inability to achieve clarity either proactively or retroactively.