Tax communications should be accurate, clear and relevant. They should use plain-language that non-experts can understand, explaining the context for any differences from the norm. They should show the big picture and create value by building public trust.
Tax transparency is not about providing additional technical detail on numbers and performance. But instead requires a broader look at tax strategy, risk management and the wider impact of tax as well as greater focus on clarity.
Over recent years there’s been a steady and welcome increase in the number of companies that see reputational value in discussing their tax affairs in a more engaging way. Our 16th Global CEO survey highlights the growing tax burden as the number one threat to business.
Since our Building Public Trust tax reporting award began eight years ago, we’ve seen more explanation of tax risk and strategy, more focus on cash taxes and a greater emphasis on tax as part of a business’s overall economic contribution.
In consultation with businesses and stakeholders, we've developed a framework - the Tax Transparency Framework. The Framework is a guide to how to communicate your company's tax position with clear and meaningful information which addresses your external stakeholders’ needs.
The Tax Transparency Framework looks at potential disclosures in three sections:
Our latest review gives insight into the tax reporting of all the companies in the FTSE100. We look at the number of companies publishing information for five key areas of tax disclosure.