Why tax transparency report enhances value?

In today’s dynamic era transparency is the most important factor to attract customers. Tax transparency is not only a legal requirement but also one of the cornerstones of long-term value propositions to deliver value to shareholders and society. Stakeholders’ growing demand for tax information from multinational companies necessitate the maintenance of maximum standards of tax transparency.
The purpose of the Tax Transparency Report is the disclosure of the tax contributions made by the company to the Governments where they operate. Details of the different types and amounts of taxes paid by the company as well as the principles that guide its tax governance are explained in this report. Publishing a Tax Transparency Report is a voluntary effort aiming to maintain transparent dialogue with stakeholders on contributions made to public finances.
Tax Transparency Reports of businesses provide an overview of how they meet their tax responsibilities. It also describes tax principles, tax strategies and trends of particular business. Report requires continue to review the reporting on tax payments and make appropriate improvements in line with any applicable regulatory developments.
In Global level Tax Transparency report have great success story. Many countries have adopted unprecedented level of Tax Transparency. Australia’s Board of Taxation developed a tax transparency code defining standard guidelines for businesses on public disclosure of tax information. Likewise, in Canada, the extractive companies are required to publicly disclose payments to governments, annually. The United Kingdom’s Finance Act 2016 requires large companies to publish an annual tax strategy in respect of activities relevant to UK taxation. Recently, the EU also laid down rules that require multinationals present in more than one country to publish the amount of taxes paid in each.
In India there is no prescribed law regarding Tax Transparency Report, it’s a voluntary act. However few companies provide Tax Transparency Report which will be useful tool for large corporate players, especially listed organisations, as they demonstrate a positive contribution to the country’s economy. The ever-changing rules and laws in various jurisdictions across the globe, TTRs are the need of the hour.

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