Nine out of ten executives believe ‘tax shaming’ is bad for business

According to 91% of finance executives worldwide, publicity surrounding tax planning has a negative impact on a company’s reputation.

A study conducted by Taxand, an advisory group, has revealed that the majority of tax directors and chief finance officers believe that the reputation of a company will be affected by public disclosure of tax planning. In 2015, 77% of finance executives had the same opinion, and five years ago, the figure was just 51%.

Taxand believes that one of the reasons that executives fear the public exposure of tax planning is that there are now more rules demanding that a company should publish the taxes which are paid in the countries in which they operate. Around 75% of executives are concerned about this.

The advisory company said:

“This concern, no doubt, is related both to the potential for competitors to gain insights into one’s corporate strategy through such information, but also the potential for misunderstanding or misinterpretation of this information, to confirm previously held erroneous beliefs.”

The managing director of Taxand, Tim Wach, also believes that tax authorities and companies often argue about tax in public, which he states can be damaging to the reputation of a company. However, Wach states that chief financial officers work hard to undertake reasonable tax planning within the regulations.

Tax and financial planning is crucial for everyone, whether a Wirral-based sole trader or a multinational company. To ensure that your tax planning is compliant with current regulations and is effective, seek advice from a reputable financial planning firm.

Source: http://www.telegraph.co.uk/business/2016/12/16/finance-bosses-terrified-tax-shame/