Fiscal Transparency & Reporting

Fiscal transparency and reporting are crucial elements in the modern tax landscape. These concepts refer to the obligations of companies to communicate their tax position, strategy, and payments in a clear and detailed manner to stakeholders, including tax authorities, investors, and other stakeholders.

Importance of fiscal transparency

What is fiscal reporting?

Fiscal reporting refers to the formal processes and systems that companies use to collect, analyze, and report their tax information. This includes both internal reports for management purposes and external reports to tax authorities and other stakeholders.

ESG reporting standards are guidelines and criteria that companies use to assess and improve their sustainability and social impact. These standards help companies be transparent about their environmental and social performance. In the area of taxation, for example, we have the following reporting standards: Global Reporting Initiative (GRI) and the Tax Governance Code (from VNO NCW). Additionally, the Corporate Sustainability Reporting Directive (CSRD) has a connection with taxation.

Components of Fiscal Reporting

1. Country-by-Country Reporting (CbCR): A requirement for multinational enterprises to provide detailed information on the allocation of income, profits, taxes paid, and other economic activities by country. Through Public Country-by-Country Reporting (PCbCR), there has been an expansion where certain information must be made public, contributing to transparency.
2. Transfer Pricing Documentation: Documentation that companies must maintain to demonstrate that their internal transactions between different entities within the same group are at arm's length.
3. Tax Control Frameworks: Systems and processes that companies implement to ensure compliance with all relevant tax laws and regulations.

Benefits of fiscal transparency & reporting.