Public Tax Reporting - Tax transparency and tax reporting
Public Tax Reporting -
Understanding complexity; making disclosure meaningful
This paper, part of the Global Responsible Tax Programme, was developed with the help of many stakeholders, but as the transparency expectations of businesses and the number of engaged stakeholders continues to grow, we believe there are always perspectives which we haven’t yet heard.
Increased tax transparency is coming for many, but an MNE simply increasing the amount of data available does not automatically translate into stakeholders having deeper insights about an MNE's activities nor does it help build trust between business, civil society, decision makers and opinion formers.
The future of meaningful tax reporting lies in understanding the information made available; this will be a joint effort between businesses who are reporting and stakeholders using that information.
Businesses will have to understand and meet reporting obligations, with quality data, explanations which are accessible and be willing to engage in dialogue with stakeholders about their business and their approach to tax. Stakeholders will have to accept that tax is a highly complex area, possibly challenging their existing understanding of concepts such as effective tax rates, to understand the tax data available and the explanations given.
This paper explores how progress can be made on both sides of reporting, and seeks to demystify some of the more difficult tax concepts so that tax reporting can become more accessible at different levels of expertise. As such, we have divided the report into three parts:
Part 1: Setting the scene — a brief overview of the expansion of tax transparency in the context of ESG, current tax reporting issues, the direction of travel and which stakeholders are interested in what and why.
Part 2: Getting into the detail — an overview of the current and incoming mandatory and voluntary tax disclosures.
Part 3: Explaining the complexity — an exploration of how best to approach sharing and explaining meaningful tax data and why narrative and numbers are so important.
The Global Responsible Tax project began in 2014 and has evolved from discussing mainly corporation and international tax issues to environmental tax, the wider tax governance and transparency agenda and the future of work. The project is valued by many different kinds of stakeholders to bring a multitude of voices to the table, which otherwise would not be in the same room together often to discuss difficult issues with contrasting points of view, to better understand each other and progress the global conversation. It continues to expand across borders and industries, and we now have a community of over 1,700 voices from businesses, to NGOs, to investors, to policymakers; across the whole spectrum.
You can visit the dedicated web platform here.