Tax governance on the management agenda
Interest in taxes from the political arena and society at large is considerable. Enterprises need to take account of numerous international developments and initiatives, both tax related and non-tax related. The strategic role of taxation has increased markedly and the risk of reputational damage deserves our attention. Tax strategy has become part of the license to operate. Consequently, tax is no longer the exclusive domain of the tax department, but of the wider group of stakeholders and it takes a prominent place on the management agenda. PwC can assist you in setting up effective corporate tax governance.
Sustainability strategy
Taxation is increasingly being seen in the context of the business's corporate strategy and sustainability goals. Encouraged by multiple stakeholders, taxation is no longer considered a cost item, but also an instrument to benefit society and as a way to meet the Sustainable Development Goals (SDGs) of the United Nations. As a result, directors and supervisory officers are closely examining their own tax policies.
Transparency
Furthermore, the modernisation of the international tax system continues. Multilateral guidelines are focused on preventing tax avoidance and regulatory developments are leading to increased tax integrity and transparency.
Stakeholder dialogue
Once businesses realize the value their stakeholders attach to transparency, they often opt to be more transparent than is legally required. Consequently, they enter into a dialogue with a broad group of interested parties, including supervisory board members, investors, employees and customers. This fits in with the trend surrounding corporate governance: the company objectives for value creation for shareholders is being broadened to long-term value creation for all stakeholders and for the community in which the company is active.
Tax governance supports a sustainable taxation strategy
Tax governance allows enterprises to adopt a sustainable taxation strategy. Tax governance includes the formulation of a long-term tax, clearly formulated roles and responsibilities, tax risk management and control, and an approach to stakeholder engagement. Finally, transparency reports are being produced that an independent party can provide assurance as a way of increasing value for stakeholders. Would you like to find out more? Get in touch with us.
Publication
Our publication on tax governance and sustainable taxation: This is the moment for organisations to (re-)design their approach to tax and develop a sustainable tax strategy that aligns with their purpose, values and sustainable business strategies. This is key for the strategic positioning of tax.
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GRI and UN PRI tax requirements
A module with two examples of tax reporting criteria of the Global Reporting Initiative tax standard ‘207: Tax 2019’ and of the UN Principles of Responsible Investment with its Investor Recommendations on Tax Disclosures.
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