The UK is rated a close second to the Netherlands, according to respondents to Deloitte’s 2014 European Tax Survey which asked over 800 tax professionals for their views on the jurisdictions with the most attractive tax system.

The UK won praise for its tax incentives, transparency and ease of compliance, the stability of the tax system and its collaborative approach. The Dutch tax authorities were singled out for similar qualities, and for having accessible information and clear and simple procedures.

One area of contrast was over the degree of tax uncertainty in each country, where 94% of respondents rated the Netherlands as positive in this respect, but only 68% viewed the UK tax system in the same way.

A high degree of tax uncertainty was identified as the major challenge to doing business in Europe, cited by 54%, along with frequent changes to legislation (39%), ambiguity, weakness and reversals in the tax authorities’ doctrine of publicly available guidance (28%), and the long duration of tax disputes (12%).

Just over half of respondents think the BEPS project is important to their tax department (51%), but 65% think it is not important to their organisation's leadership.  

James Wright, tax partner at Deloitte, said: ‘It is surprising that just 35% think it is important to their organisation’s leadership, and 69% have not yet started planning for the likely impact.’

Only the UK (57%) and Switzerland (58%) have more respondents who have taken action on BEPS planning than those who have not.

Wright said: ‘Of those who have started planning for BEPS, half have taken steps to meet the new compliance requirements for transfer pricing documentation, and 11% for hybrids. Only 47% acknowledge that BEPs will have an effect on their tax strategy and recognise that it will probably increase the cost of compliance.’

Overall, Italy was seen as the most challenging of the seven large European economies from a tax perspective, followed by France and Russia.

Half (49%) of the respondents said that simplifying the tax system would have a great impact on competitiveness, closely followed by more certainty around the future (48%), while 28% stressed the importance of a very predictable and collaborative tax authority.

Deloitte’s research also shows  closer scrutiny of corporate tax strategy in western Europe, with respondents in the UK (81%), France (80%) and the Netherlands (74%) all reporting more questioning by internal and external stakeholders.

In contrast, the topic is not on the agenda in eastern and southern Europe – for example, the survey found that 86% of Bulgarian tax directors did not think tax was any more of an issue now than last year. 

This report follows the release of the 100 Group tax report by PwC, released earlier this week which showed that the top UK listed companies had paid more tax than in previous years although corporation tax payments were lower than 2012-13.