Governance in brief — The Global Tax Reset and the reporting of tax in annual accounts
Taxation and tax transparency is currently an area of substantial focus for governments and regulators worldwide.
Over the past two years, a consensus has been reached under the OECD and G20 Base Erosion and Profit Shifting (BEPS) project, which has brought together over 60 countries to review and refresh international tax standards. 13 final reports outlining the consensus actions were issued in October.
During December, the FRC has announced a thematic review of companies’ tax reporting which will go beyond the accounting disclosures to consider narrative reporting, including the disclosure of principal risks. In addition, HMRC has announced that requirements for large companies to publish their tax strategy will be included in the 2016 Finance Bill.
In this Governance in brief publication we explore the main issues that companies are addressing with regard to the reporting of tax in annual accounts, explain the drivers of change and introduce the process that companies are going through in order to respond to these external demands. We also include some key questions that Boards should be asking regarding tax transparency.
