Change Country

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

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.

Related Insights

International Businesses

Bringing Mobility to Detroit

Posted on September 13, 2022 by

Teresa Gordon leader of the global accounting team at Clayton & McKervey
We’re excited to share this news from the Detroit Regional Partnership. For companies needing help planning mobility focused expansion to the US – from the UK, Europe or Asia, there is a well-connected team to help with all aspects of foreign direct investment.  Learn more about how we can help here.

International Businesses

The Future of Global Mobility Tax

Posted on September 12, 2022 by

Teresa Gordon leader of the global accounting team at Clayton & McKervey
The global mobility landscape is changing. What began as a need to work from home during the worldwide pandemic is evolving into a “work from anywhere” trend that appears to be here to stay. Learn how this impacts the competition for talent and multi-jurisdiction tax compliance.

Tax & Assurance Guidance

Keeping Up With Digital Taxes

Posted on September 6, 2022 by

Miroslav Georgiev
Sue Tuson
To the uninitiated, selling digital products and services can seem like a much easier business model than selling physical goods. While there may be advantages to skipping inventory and warehouse needs, the digital tax landscape can be tricky to navigate. 

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