Tell it as it is

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I was in a meeting with some tax directors of some pretty major companies recently. It's amazing what they'll say to a lay audience. Try this:

Deferred tax is just a timing difference; it's always paid in full in the end.

The cut in UK corporation tax proves that's not true. The tax director in question will be writing 1/15 th off his deferred tax reserve as a result and all the empirical evidence shows deferred tax is not crystallising.

Try this for another one:

We file our accounts on public record in most countries.

As just a little teasing out showed, 'most' means 'when required to do so by law'. There's no disclsoure when not so required. And funnily enough the person who said that has one or two tax haven subsidiaries, for starters.

Funnily enough, another director present said (and I paraphrase):

We never want to file if it would mean specific details of our operations could be identified. That might make them vulnerable to sale.

Two things occurred to me. The first was that if the price was right they should be sold. That's called acting in the shareholder's bets interests. The second was that all domestic companies do file such details in most countries, why should this concern want to avoid the general rule?

I like meeting business people. I assume they're honest, even if they seek to avoid the rules. I do wish they would tell the facts as they are though. It would help communication, a lot.