{"id":18409,"date":"2012-11-30T09:20:11","date_gmt":"2012-11-30T09:20:11","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=18409"},"modified":"2012-11-30T09:20:11","modified_gmt":"2012-11-30T09:20:11","slug":"business-is-accepting-the-idea-they-have-to-say-a-lot-more-about-their-tax-affairs","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2012\/11\/30\/business-is-accepting-the-idea-they-have-to-say-a-lot-more-about-their-tax-affairs\/","title":{"rendered":"Business is accepting the idea they have to say a lot more about their tax affairs"},"content":{"rendered":"

The FT has what I consider to be an important article this morning<\/a>. For the first time that I recall it records a \u00a0Big 4 firm of accountants saying the time has come for radical\u00a0change\u00a0in the disclosure of what companies report for tax purposes. The article says:<\/p>\n

Big companies are set to divulge more details of their tax affairs as they try to fend off\u00a0pressure over aggressive tax planning<\/a>\u00a0from MPs, investors and the media, according to a leading firm of advisers.\u00a0KPMG, the professional services firm, said there had been a \u201csea change in mood\u201d towards tax disclosures after intense public criticism of the low\u00a0corporate tax payments of some multinationals<\/a>. Jane McCormick, head of tax, said: \u201cThere is a feeling of inevitability about a move to greater transparency\u201d.<\/p><\/blockquote>\n

Having campaigned for such\u00a0transparency\u00a0for a decade I, hardly\u00a0surprisingly, welcome this. The devil is,\u00a0however, always in the\u00a0detail\u00a0and the ability of these\u00a0companies\u00a0to try to fob people off is enormous. The whole CSR agenda has been one largely\u00a0wasteful exercise in doing so. Intent is, therefore,\u00a0important. The FT notes:<\/div>\n
\n

More information could lead to a better understanding of the tax system, which might defuse anger in cases where low rates were not a result of aggressive tax plans, according to KPMG.<\/p><\/blockquote>\n

That sounds good. The follow up does not:<\/p>\n<\/div>\n

\u201cThe risk is that, without this transparency, the current debate may turn into a witch-hunt, deterring businesses from investing in the UK,\u201d Ms McCormick said.\u00a0Ms McCormick said the risk of being \u201chauled in front of the PAC\u201d was under discussion with potential inward investors.<\/p><\/blockquote>\n

That's complete nonsense: the demand for tax transparency is, if anything, being lead in Europe. This is not just a UK issue, so that is a complete red herring. And the reality of what KPMG is about becomes clear in the next comment:<\/p>\n

Giving out more tax information could defuse pressure for disclosure laws, she said. Most companies surveyed were opposed to the idea of legislation requiring detailed tax disclosures.<\/p><\/blockquote>\n

So, that's back to the nonsense of CSR again. Thankfully, some\u00a0companies\u00a0realise that is not the way to go:<\/p>\n

But one in four companies said EU proposals requiring extractive industries to disclose details of tax payments should be broadened to other businesses.<\/p><\/blockquote>\n

This is, of course,\u00a0country-by-country reporting<\/a>, the accounting concept I created ten years ago. It is the only way to go. KPMG does not agree as yet, saying\u00a0it expects tax reports to become a feature of annual reports, in the same way as corporate social responsibility statements have become the norm. I welcome the idea of such reports. But\u00a0without\u00a0statutory backing they would be\u00a0meaningless. They would also ignore\u00a0critical\u00a0issues such as profit\u00a0shifting\u00a0in intra-group\u00a0trade, the use of tax havens and \u00a0intra-group financing that are really used to manipulate profit reporting. Country-by-country reporting addresses all those issues. \u00a0That's why we need full country-by-country reporting.<\/p>\n

But there is something I can agree about with Ms McCormick. She said:<\/p>\n

\u201cSome people are already doing it. Others are preparing to do it. Others are still thinking about it. It is definitely a trend.\u201d<\/p><\/blockquote>\n

I think it's more than that. It's going to happen.<\/p>\n","protected":false},"excerpt":{"rendered":"

The FT has what I consider to be an important article this morning. For the first time that I recall it records a \u00a0Big 4
 Read the full article…<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[79],"tags":[],"class_list":["post-18409","post","type-post","status-publish","format-standard","hentry","category-country-by-country"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/18409","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=18409"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/18409\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=18409"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=18409"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=18409"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}