Some company executives are skeptical about engaging in a relationship of cooperation and trust with tax administrators . Rake explained that while there are several levels of cynicism or concern, two primary issues that may give pause are the political elements of taxation and the sheer complexity of the subject .
Among the political elements is tax competition among jurisdictions .
“There is absolutely no doubt that countries create tax opportunities to encourage investment and to tempt investment away . There’s absolutely no doubt that this gives rise to some legitimate opportunities for tax arbitrage .”
If taxation is viewed as a purely political issue and the world doesn’t have a level tax playing field, then there may be less of an incentive for corporations to engage, said Rake .
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