International Businesses, Tax & Assurance Guidance

Name and Shame: Governments Publish Corporate Tax Report Cards

Posted on April 8, 2016 by

Clayton & Mckervey

Clayton & McKervey

Share This

Share on facebook
Share on twitter
Share on linkedin
Share on email

Tax transparency has become more than a buzzword for tax authorities. Outrage over companies not paying their fair share of tax has become front page news in many countries, and politicians have reacted by implementing some radical new disclosure requirements.

One newsworthy development: programs developed to help identify aggressive tax strategies are now leading to public disclosures of taxes paid by companies.

On March 22, 2016, Australia published how much income tax was paid by certain public, private, and foreign-owned multinationals. The spreadsheet provided company names, revenues, taxable income, and taxes paid. Several countries have already proposed following Australia’s lead.

We expect the recent release of the ‘Panama Papers’ will only intensify demands for similar public disclosures elsewhere.

Start with Apple, Google, and Starbucks, but Smaller Companies Also Face Risks

Governments worldwide are working together to crack down on aggressive tax structures. The Organisation for Economic Co-operation and Development (“OECD”) has been central to the development of new tax transparency requirements.

Numerous countries have already announced that OECD’s initiatives will be implemented starting with years starting on, or after, January 1, 2016. We expect the IRS will unveil their strategy on June 30, 2016, applying for years starting on, or after, January 1, 2017.

A particularly noteworthy change is tax authorities will have higher transfer pricing documentation standards, affecting companies of all sizes.

What Does a Report Card Include?

View the first report card.

The Australian Taxation Office (“ATO”) released tax information on companies with more than A$100 million (U$75 million) in revenue, including 985 foreign-owned public and private companies. While the ATO did caution that companies paying no tax did not equate to tax evasion, some companies have already posted explanations for their tax payments on company websites.

Who’s Next?

The European Union, for one. EU-wide legislation is currently under negotiation, but company revenue thresholds for reporting tax payments publicly have not been established.

The Takeaway

Multinational companies not only face enhanced transfer pricing scrutiny but higher reputational risks from public disclosure of corporate tax payments. We expect other countries to follow suit as tax transparency programs are implemented over the next two to three years.

Clayton & McKervey

Related Insights

Tax & Assurance Guidance

Foreign Tax Withholding: What You Need to Know

Posted on April 26, 2022 by

Rob Cheyne
Making service payments to a foreign person is a common cross-border transaction. U.S. taxpayers need to be aware of the applicability of withholding tax and related reporting requirements to ensure they comply and avoid unintended consequences. A U.S. payor must collect withholding tax and remit it to the IRS in the case it is applicable.

International Businesses

Are You Ready to Sell Your Mexican Subsidiary? 

Posted on April 19, 2022 by

Carlos Calderon
With M&A activity soaring in the U.S., we have been involved in dozens of deals involving U.S. entities with Mexican subsidiaries. These types of businesses have become more attractive to potential buyers for many reasons: China vs. U.S. commercial war, increased freight costs, shipment delays, disruption and operational limitations due to COVID-19; especially for Asian companies.

International Businesses

Russian Sanctions Complicate Banking Around the Globe

Posted on April 12, 2022 by

Sarah Russell
NATO countries have banded together to impose historic sanctions on Russia for their invasion of Ukraine in a display of strength and unity. These sanctions mean that companies currently cannot send payments to Russian banks and trying to get around this can result in significant penalties. While it may seem straightforward, these sanctions have complicated the geopolitical landscape of making international deals that extends beyond the borders of just Ukraine and Russia.  

Sign up for our newsletters

Get general business and industry-specific news and knowledge straight from our accounting specialists.

The Sound of Automation Podcast

The Sound of Automation Podcast

Industrial automation businesses are the driving force behind Industry 4.0, and Clayton & McKervey is here to help.

Insights & Perspectives

The Sound of Automation: Looking ahead to CSIA 2022

In this episode we talk with Lisa Richter, Director of Industry Outreach and Growth at Control System Integrators Association (CSIA) . Lisa and Bryan look ahead to the CSIA Executive conference taking place in Denver, CO on June 27-30, 2022 and share with listeners what to expect, who will be there, and the discussion panel topics focusing on this years’ theme “The Future of Work”. 

Read More

The Sound of Automation Podcast

Industrial automation businesses are the driving force behind Industry 4.0, and Clayton & McKervey is here to help.

Skip to content