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Turkey Tops New Tax Complexity Index

by Ulrika Lomas,, Brussels

27 July 2017

Turkey is the jurisdiction with the world's most complex tax and accounting requirements, according to a new report by TMF Group.

TMF's Financial Complexity Index 2017 ranks 94 jurisdictions across Europe, the Middle East, Africa, Asia Pacific, and the Americas.

According to the report, Turkey is the most complex jurisdiction overall in which to stay financially compliant "largely due to the requirement to report in both Turkish language and currency and the extremely high number of tax articles." However, it noted that the burden is reducing, with Turkey seeking to harmonize its rules with those of the European Union.

Brazil follows Turkey in second place, where complying with three layers of tax laws and regulations - at federal, state, and municipal level - "poses a serious challenge" to taxpayers, TMF said.

"A total of 90+ taxes, duties, and contributions are charged in Brazil. All taxes are based on different government sphere of federal taxes, state taxes, and municipal taxes. Knowing which taxes to pay, to which government entity, and for which product or service poses a serious challenge to businesses operating in Brazil," the firm observed.

In Europe, Italy has the most complex tax regime, while taxpayers in Greece will find the region's most difficult tax compliance environment.

"Both Italy and Greece have very localized complexities. In Italy, taxes are levied at a national, regional, and municipal level, while in Greece taxes are divided into three categories: income, property, and consumption tax," said TMF Group's Head of EMEA, Juraj Gerzeni.

"Despite measures to reduce taxation and align Italian accounting measures with international rules, the country still has some very specific requirements that contribute to its index ranking. Greece meanwhile has an extremely complex set of tax rules that directly impact local accounting," Gerzeni added.

Rounding out the top-ten most complex tax jurisdictions are Vietnam (5th), Colombia (6th), China (7th), Belgium (8th), Argentina (9th), and India (10th).

The five least complex jurisdictions are Jersey (90th), Hong Kong (91st), the UAE (92nd), the BVI (93rd) and the Cayman Islands (94th). These territories have simplified reporting requirements and have low rates of tax, TMF noted.

TAGS: environment | compliance | Asia Pacific | tax | business | value added tax (VAT) | tax compliance | Belgium | India | law | accounting | Cayman Islands | China | Colombia | Jersey | Brazil | Greece | Hong Kong | Italy | currency | regulation | Argentina | Turkey | Vietnam | Europe | Africa | Middle East

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