Blog : BOARD TALK
|Posted on May 27, 2015 at 3:05 PM|
Tax transparency is, indeed the new norm as the OECD, European Commission and national governments demand more data from businesses. And you have to hand it to EY for seizing the opportunity to grow its business.
Its survey of 962 tax and finance executives in 27 jurisdictions has found 83% reporting that they regularly brief the CEO or CFO on the issue of tax. But 71% of businesses say they need more resources to meet the growing demand for tax transparency required of them.
There is near unanimity among companies surveyed that gobal disclosure and transparency requirements will continue to grow in the next two years. Some 94% of the largest companies with any opinion on the matter agreed with that assertion.
As the global demand for tax transparency - which includes debate on what constitutes a 'fair' share of tax - continues, it constitutes part of an elevated reputation risk for any boardroom. "Companies must now assume that tax data required in one country will be available to tax administrators in others, particularly given the advent of the OECD's Base Erosion and Profit Shifting (BEPS) Action 13" says EY.
EY's report A new mountain to climb: tax reputation risk, growing transparency demands and the importance of data readiness - which is the third instalment of the 2014-15 Tax risk and controversy survey series sets out steps companies can take to get ready for the transparency required.
Jay Nibbe, EY
"Increasing transparency readiness presents an opportunity not only to comply with new disclosure demands but also to work proactively to mitigate reputation risk" says Jay Nibbe, EY Global Vice Chair of Tax.
"Getting prepared will require some additional investment in technology, data extraction capabilities and new skills in people respources. It also involves increased awareness on how you think about your tax position, and how it could be perceived by a wide range of stakeholders" he adds.