Results of a KPMG survey released May 18 indicate the worldwide trend for multinational corporations to move from high-tax to low-tax jurisdictions has accelerated in the last year.

KPMG polled senior tax executives at its 2006 international tax conference in Berlin and found 62 percent of respondents said they were planning to move "assets or operations" to a low-tax regime--up from 55 percent at the Big Four firm's 2005 conference in Rome.

Aggressive approaches in countering tax-planning arrangements from revenue agencies could be driving the trend, with 14 percent of respondents saying they had already moved part of their operations to a lower-tax regime because of "more aggressive tax-planning challenges," KPMG said.

The United States was cited as the most aggressive country, followed by the United Kingdom and Germany.

"The clear message from business is that tax rates are important, but in our experience they are not everything when it comes to deciding where to site your operations," said Loughlin Hickey, KPMG's global head of tax.

"If companies find a country in which relations with the tax authorities are conducted in a constructive and predictable way, they may accept a higher tax rate ... as a reasonable cost of doing business," Hickey said.

He cautioned this does not mean corporations will stop planning to reduce their effective tax rate--more than 70 percent of the tax executives surveyed said they had reacted to increasingly aggressive challenges by becoming more sophisticated in their tax planning and management of tax processes.

Greater Shareholder Interest in Tax Matters

The survey also reported investors and shareholders are taking a keener interest in corporate tax affairs.

Eighty percent of executives said they were finding it of "great or increasing importance to communicate with investors and shareholders" on tax matters--sharply up from 69 percent in 2005, KPMG said.

"Tax is very clearly being pushed onto the boardroom agenda by shareholders and investors, as well as tax authorities," said Hickey.

"Tax policy is no longer a backroom issue, it is a fundamental part of good corporate governance, which needs to be communicated openly and effectively," he added.

A KPMG news release on the survey is available on the Web at http://www.kpmg.co.uk