UK finance leaders expect incoming international regulatory reform and sustainability-related reporting rules to have a major impact on their organisationās finance functions, according to the latest EY Tax and Finance Operations Survey (TFO).
The reporting period for global 15% minimum tax rate called for under the base erosion and profit shifting (BEPS) Pillar Two will come into effect in the UK from 31 December 2023. The survey found that 89% of UK finance leaders expect their tax planning and business operations to experience āmoderateā to āsignificantā change once BEPS 2.0 is implemented.
However, readiness for this change is a key area of concern, with only 42% of UK respondents having completed a Pillar Two impact assessment at the time of completing the survey.
Meanwhile, 72% of UK respondents expect the incoming EU Carbon Border Adjustment Mechanism (CBAM) to have a significant impact on their organisationās tax and finance function. The tax on imports of carbon-intensive products into the EU comes into effect later this year initially as a reporting obligation rather than a financial obligation. These reporting obligations fall on importers, with submission for the first reporting period due by 31 January 2024.
