The shift in the "atmosphere around tax" globally is "significant" and has "hardened," the chief executive of WPP, which famously moved to Ireland to avoid U.K. tax regime change, has told CNBC.
"Tax regimes are being tightened up," Sir Martin Sorrell said, and cited a clampdown on "postbox companies."
There has been increased international focus on tax avoidance and tax havens since the financial crisis, with the Organisation for Economic Co-operation and Development recently focusing on closing down tax loopholes. These could include the so-called "Double Irish Dutch," where companies use Irish and Dutch subsidiaries to switch profits to lower tax jurisdictions.
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WPP has recently returned to London from Dublin.
"We thought that the British regime was going to tighten…and when the coalition government gave an undertaking that wouldn't be the case, we came back," Sorrell said.
WPP, one of the world's biggest advertising companies, announced slightly better than expected revenues of £2.57 billion ($4.57 billion) for the first quarter, a 1.5 percent rise – but currency headwinds knocked 8.1 percent off reported revenues. The advertising group, which is listed in London but has operations all over the world, felt the impact of sterling's strength in the last quarter of 2013 in its revenues.
Sorrell confirmed that "the biggest short-term issue" for the companies was the strength of sterling.
Net new business fell to $1.275 billion in the first quarter, compared to $1.504 billion at the same time in 2014.
WPP is one of the companies often cited as a good indicator of overall economic performance. Its results confirm weakening growth in emerging markets.
"Mature markets are outpacing the fast-paced markets in this quarter," Sorrell said.
"There is a recovery in Western Europe. The U.K. is very strong."
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He added that, out of the BRICS countries, India and Brazil were performing well but Russia and China were slowing. WPP is one of the companies often cited as a good indicator of overall economic performance.