Strategizing International Tax Best Practices – by Keith Brockman

Posts tagged ‘tax disclosure framework’

Tax disclosure framework: Map to transparency

KPMG has engaged with several UK headquartered multinationals to address how to proceed with future, and dissimilar, demands for transparency.  Although focused on UK based organisations, the framework promotes valuable Best Practices that can be used globally.  A link to the insightful article is provided for reference:

Click to access developing-a-common-frameword-for-disclosing-tax-information.pdf

Five themes for a tax disclosure framework:

  1. Strategy/policy and approach to tax
    1. Tax policy
    2. Tax planning and risk approach
    3. Engagement with tax authorities
  2. Tax risk governance
    1. Link between tax strategy and governance
    2. Tax compliance and tax risk monitoring
    3. Non-compliance governance tools
  3. Business model
    1. Overview, including tax attributes for effective tax rate and cash taxes
    2. Transfer pricing overview
    3. Operations in low tax jurisdictions
  4. Tax contribution
    1. Data/narrative re: sales, profits and taxes paid
    2. Types of taxes paid and use of a company’s profits
  5. Specific information related to material issues
    1. Tax losses/carryovers
    2. Tax incentives/holidays
    3. Material items, such as pension contributions

The above issues exemplify the difficulty in developing a comprehensive framework, or flexible tool, to meet the varying transparency demands resulting from OECD, EU and UN guidelines and unilateral legislation efforts around the world.

The most important point is that the timing for the thought processes for a tax disclosure framework is now; there are no signs of the demand for tax transparency diminishing.

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