Tax transparency and tax reporting
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.
This paper 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. If you would like to discuss any of the issues or ideas raised by the paper, please do not hesitate to contact us.
by Grant Wardell-Johnson
Grant is currently Head of Global Tax Policy at KPMG International. Prior to this, he took on the role of Head of the Australian Tax Centre at KPMG Australia. He has a background in providing tax advice relating to international and domestic tax structuring, international cross-border acquisitions and initial public offerings. Grant has been the lead Tax Partner on many high-profile projects in the Australian and international markets, including the Wesfarmers acquisition of Coles Limited, Macquarie Group consortia...
by Chris Morgan
Chris became Head of Tax Policy for KPMG UK in 2011. In this role he was a regular commentator in the press, as well as on radio and TV, led discussions on various representations with HMRC/HMT. In 2014 Chris spearheaded KPMG UK’s Responsible Tax for the Common Good initiative. In September 2016 Chris took on the role of Head of...
