Businesses are increasingly expected to go beyond existing legal requirements and volunteer more information about their approach to the management of tax and its outcomes (i.e. the taxes they pay and collect on behalf of others). Communicating effectively about a complex subject such as tax is important but can be difficult, particularly in the absence of common standards.
In addition to the content below, you can also download our practical summary on how groups are responding to a variety of tax transparency drivers, and read our detailed thought piece on how tax transparency initiatives are evolving and the trends we’re seeing in the market.
Experience and evidence show that there is no single ‘right’ way for all businesses to respond to these expectations. Instead, groups’ disclosures are influenced by a varying range of factors; from external stakeholder expectations (such as regulators, tax authorities, investors and customers) to internal expectations and considerations (such as pressure from employees and senior management, a need to be consistent with other Environmental, Social and Governance (ESG) disclosures, or a desire to keep up with peers).
Although there are a lot of different drivers for groups, and a wide variety of external transparency regimes groups may be aligned with, groups typically make voluntary tax disclosures under the following themes: context, approach, key matters, data and assurance.
Regardless of the scale and starting point, groups would do well to follow a proven four step process when developing and enhancing their tax transparency disclosure:
Execute your communications strategy, delivering your key messaging with confidence.
In addition to supporting groups across all four of the steps above, Deloitte has extensive experience working with organisations across multiple industries to assist them in planning their responses to legislative change and new ESG governance and compliance requirements. To discuss your ESG requirements in more detail, please get in touch with our team through the contacts below, or speak to your regular Deloitte Tax contact.