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Seventy-seven percent of global private companies say tax issues are a significant factor in deciding where to establish an operating base overseas, according to new research from Grant Thornton.
The accountancy firm's latest annual International Business Report also finds that 70% of multinationals parented in the USA are of the same opinion.
The importance placed on tax by overseas companies looking to do business elsewhere does not bode well for the UK, remarked Grant Thornton, particularly in light of the current environment in which there is continuing uncertainty surrounding the country's tax system.
Fifty seven percent of UK private companies said tax was a significant factor when investing overseas, arguably reflecting the relative simplicity of other tax regimes.
Roopa Aitken, international corporate tax partner at Grant Thornton, said: 'It is interesting to compare the UK statistic for private companies in light of the recent rise in larger listed multinational corporations, such as Henderson, Charter and Regus, who have relocated their parent company out of the UK, with the bulk of the recent relocations going to Ireland.
'In light of the emphasis that US groups place on tax when setting up new business overseas, there is a real concern that the UK will not be the preferred choice for a European holding company.
'This is partly because the UK tax system currently taxes dividends when they are paid back to the UK, and also other income arising offshore under the Controlled Foreign Companies regime.'
Ms Aitken added: 'This often leads to significant complexity and compliance burden for UK companies, even if relatively little UK tax is at stake. Companies looking to invest in the UK will recognise and compare this with other countries; in many, perhaps most cases the conclusion will not favour the UK'.
Earlier this month, a study by KPMG claimed that the UK's corporate tax rate remains higher than the global average of 25.9%, despite a 2% cut this year.
