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Tax is a global reality, and today, it demands both a global conversation and, where appropriate, global action.

As the world becomes more interconnected, discussions about who pays tax, both how and when are likely to intensify. Meaningful discussions about responsible tax need to include all stakeholders, in an open, honest and robust dialogue and debate, and at KPMG Acor Tax, we bring together these perspectives from around the world for a sustained, inclusive and productive discussion about the key issues that are affecting and shaping globalization, digitization and taxation.

Over the past years, there has been an increasing attention to and debate about companies’ approach to responsible tax, particularly large multinational companies. In an ever-more transparent world, communication on tax is critical to an organization’s ability to earn and retain public trust.

In Denmark, the importance for companies of demonstrating that tax governance measures are in place has experienced a step change with a strong link to the Responsible Tax agenda. If tax affairs are perceived as irresponsible or aggressive, it may lead to brand and reputational damage. Moreover, large institutional investors are now putting pressure on the companies they invest in to increase transparency and improve their communication about their tax affairs.

In our experience, there are four building blocks to a market leading approach to responsible tax. We have listed them below together with some elaborating examples.

The four building blocks

How KPMG Acor Tax can help

The four key areas we have defined are interdependent. Actions taken to increase your organisation’s maturity in one area will often have a positive spill over effect on another area, whilst improvements in one area may require changes in another first.

KPMG Acor Tax can help you navigate this situation based on our deep insight and vast experience. The illustration below provide an overview of steps that need to be taken, based on our experience, within the four building blocks. They can be tailored to align with a specific set of principles (e.g. B Team) or reporting requirements (e.g. GRI 207).      

Accountability & Governance

  • Draft group tax policies, tax strategy and tax risk appetite
  • Implement IFRIC 23 process and reporting
  • Analyse and test existing tax control framework 
  • Implement a tax risk management framework to manage risks across all taxes

Relationship with Authorities

  • How to best prepare for entering into cooperative compliance relationships
  • Benchmarking tax authorities’ expectations and requirements across the world
  • Conducting data analytics-driven ghost audits

Compliance & Business Structure

  • Conduct tax risk assessments and local/global compliance health checks (spot checks)
  • Business structure review
  • Provide external assurance on compliance with tax policy

 

Transparency & Public Disclosure

  • Tax transparency readiness assessment
  • Prepare or review tax transparency reports, including public Country-by-Country Report, Total Tax Footprint and impact of COVID-19 aid packages
  • Benchmark your public disclosures against leading practices and prepare a plan for closing gaps

    

Contact us for more information