WWHHOO’’SS WWHHOO:: LLOOIICC WWAALLLLAAEERRTT

Financial Mirror (Cyprus) - - FRONT PAGE -

In the in­ter­view, Wal­laert spoke about the sig­nif­i­cant tax­a­tion changes in Europe, the Brexit, as well as Mazars’ global ex­pan­sion drive and strate­gies.

“If I look at the past few years and the cur­rent sit­u­a­tion and the fu­ture, in the past few years we have seen an in­crease in the tax, be­cause, there were some economies in Europe which were not in very good shape, and there­fore a few coun­tries that in­creased the tax rate. And this has been done in many coun­tries be­cause the state needed to have some rev­enues.

“I think we have reached a level which is a limit, and now we start to see a de­crease in a few coun­tries, a move which we start to see on a reg­u­lar ba­sis, which hap­pened at the time when you have the so-called ‘coun­try by coun­try re­port­ing’ which is go­ing to lead big groups to dis­close the tax they pay in the var­i­ous coun­tries.

“This is rais­ing for our clients in­ter­est­ing ques­tions, and of course not all ques­tions are an­swered by the law right now and this is an area where we are work­ing closely with our clients, to make sure that the law is well un­der­stood and that it is fully taken into ac­count.

“But this may also lead to a plateau in the tax rate in some coun­tries, and the Brexit will also in­flu­ence all this.

“What we can say is that there is also the trend that I see more and more for the groups to say ‘we need to have a fair at­ti­tude with the tax and we need to pay taxes which are rea­son­able’. And we at Mazars are deeply in­volved in that process, say­ing that we need to have our clients to be rea­son­able in what they are do­ing on tax. To avoid the crazy sit­u­a­tion where they don’t pay tax in any coun­try of the world and on the back of huge prof­its, but also to have a good anal­y­sis of the tax scheme in each of the coun­try. This is one of the top­ics on which we are work­ing a lot with the groups and I think they ap­pre­ci­ate our view in this re­spect, to do some­thing which is rea­son­able for the busi­ness com­mu­nity at large, for the coun­tries where the groups op­er­ate, and for the in­di­vid­ual tax­payer of that coun­try, be­cause it is fair that groups also pay tax.”

“The tax reg­u­la­tor asks us for our views, on any topic, we

Loic Wal­laert, part­ner in France and Ad­vi­sor to the Group Ex­ec­u­tive Board, joined Mazars in 1995. He has a sig­nif­i­cant ex­pe­ri­ence in the au­dit of large listed in­ter­na­tional

do that for tax rea­sons, also for ac­count­ing. Clearly we have an open dis­cus­sion with the tax au­thor­i­ties and they ask us for our views when there is a new tax to be in­tro­duced. They like to have a reading by pro­fes­sional tax ad­vis­ers on new tax leg­is­la­tion in many coun­tries and we are happy to do that and we also have a com­pre­hen­sive dis­cus­sion on what is fair, what is the evo­lu­tion in var­i­ous coun­tries, and so on.

“So, it’s not ex­actly lob­by­ing, it’s open dis­cus­sion with the tax au­thor­ity – we are happy to an­swer their ques­tions on the gen­eral land­scape of the tax world or in Europe.”

“There is this global ap­proach for tax called BEPS (base ero­sion and profit shift­ing) there is a world­wide move, not only in Europe, to say there should be more trans­parency on tax and things should be fair. Now, of course, it would be im­pos­si­ble to fully reg­u­late the world and it’s some­thing which will never hap­pen. We are not go­ing to have an even tax rate in all the coun­tries one day. This is a dream but it’s never go­ing to hap­pen. Let’s be re­al­is­tic.”

[BEPS refers to tax avoid­ance strate­gies that ex­ploit gaps and mis­matches in tax rules to ar­ti­fi­cially shift prof­its to low or no-tax lo­ca­tions. Un­der the in­clu­sive frame­work, over 100 coun­tries and ju­ris­dic­tions are col­lab­o­rat­ing to im­ple­ment the BEPS mea­sures and tackle BEPS.]

“But there is more and more trans­parency on this, as BEPS is be­com­ing a huge is­sue and OECD is look­ing at that, ev­ery­body is look­ing at that. I don’t think we are still there. Tax is still an in­cen­tive for cor­po­ra­tions, there is still use for that. But there is a move for more trans­parency and fair­ness. Through Prax­ity, the global al­liance of in­de­pen­dent firms, Mazars is one of the key play­ers, we can help clients to say what is the limit be­tween some­thing which is go­ing too far and some­thing which is more rea­son­able.

“We are well po­si­tioned, and based on what we see in all the coun­tries, we con­sider where to po­si­tion the cus­tomer in terms of tax rate.”

“There will al­ways be tax dif­fer­ence, be­cause, there is a move to more har­mon­i­sa­tion, but there will al­ways be a dif­fer­ent thing. When I say ‘tax’, it can be VAT, cus­toms, in­come tax, it’s a huge spec­trum.

“There is a real push to har­monise tax­a­tion, but it will take time. And that’s why at Mazars we clearly are a tax prac­tice with a pres­ence all over the world and this is one of the strengths of Mazars too. We gather our tax peo­ple on a reg­u­lar ba­sis, to make sure that we share the vi­sion of a com­mon mar­ket, and the di­rec­tion of where we are go­ing, and ex­change a lot on a reg­u­lar ba­sis to make sure that we can help our clients, be­ing fully aware about the moves that are go­ing to come in 2-3 years.

“On in­ter­na­tional tax we have a lot of peo­ple work­ing on trans­fer pric­ing be­cause this is also a very sig­nif­i­cant is­sue and there­fore they gather fre­quently be­cause trans­fer pric­ing is a fully in­ter­na­tional topic. We are one firm op­er­at­ing in 77 coun­tries, we are all part­ners, and that helps be­cause we work to­gether as a team, even though we are not in the same coun­try.”

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