KPMG has created The Green Tax Index to increase awareness of the complex, fragmented and rapidly evolving green tax landscape worldwide. It aims to encourage companies to explore the opportunities of green tax incentives, and to reduce exposure to green tax penalties.
KPMG International has analyzed 21 countries for this report and found that all of them have green tax systems that warrant attention from corporate tax and sustainability teams. The research identified over 200 individual tax incentives and penalties of relevance to corporate sustainability. At least 30 of these have been introduced since January 2011.
There is evidence to suggest that not all corporate tax teams are fully aware of the landscape of green tax in which they operate and the incentives that may be on offer. For example, in March 2012, Bloomberg BNA surveyed tax accountants and tax lawyers in the US to gauge knowledge and awareness of tax incentives for clean energy.4 Two-thirds of those interviewed were unaware of how US clean energy tax credits work.
This is a concern. As environmental and social challenges gather pace, future business value depends on carving competitive advantage out of complex and unpredictable risks. In most sectors it requires transformational change.