Increased transparency and awareness for tax planning can show the societal impact of an enterprise and substantiate it with exact figures
– By doing this, taxation can become a vital part of environmental, social and governance (ESG) reporting.
While no single global framework for Tax Transparency Reporting has emerged, a number of standards are applicable that can shape the way organizations report tax, among them GRI 207, Action 13 of OECD’s BEPS or the EU Accounting Directive.
For the purposes of creating holistic Tax Transparency reporting, both qualitative and quantitative aspects need to be recognized.
Qualitative aspects focus on the development of a tax transparency strategy framework and the applicable policies which are deducted from it. The quantitative aspects focus on the presentation of KPIs related to an organizations taxes collected, borne or otherwise involved in across jurisdictions and entities.
Typically, Tax Transparency reporting is done as supplementary information to the consolidated financial statements of an organization and will provide share- and stakeholders with necessary and often requested additional insights.