Transparency intelligence helps manage reputational risk

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August 2020

Overview

In a world of comprehensive transparency, global tax authorities are using transparency to respond to a perceived political urgency in requiring multinational enterprises to pay their ‘fair share’ of taxes. Tax authorities also are increasingly using publicly available information generated by new technologies and 24/7 media to question underlying facts supporting corporate tax positions. In addition, tax authorities are crowdsourcing company information across multiple industries and jurisdictional borders to challenge tax positions, make adjustments, and impose penalties. 

Companies should be prepared with a well-coordinated communication strategy around sharing tax-related information with governments, regulators, investors, and the public. Tax authorities and the media expect proactive transparency and comprehensive reporting from multinational enterprises with diverse tax structures. Businesses should seek to manage their reputational risks by researching and analyzing publicly available information regarding their operating structures and tax positions.

The takeaway

In particular, businesses should consider the following questions: 

  • Are you confident that your executives’ public statements or other public company information are consistent with your tax positions?
  • Have you scanned the web/public information sources — e.g., press releases, LinkedIn profiles of executives, local websites in local language, industry publications, media articles, and social media activity — for possibly questionable information that should be examined and addressed?
  • Do you have internal and external communication protocols aligned with your tax positions?

Contact us

Michelle Lee

Health Industry & Pharma Life Science Tax Leader, PwC US

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