Tax Transparency Benchmark 2016

Fuelled by revelations such as the Panama Papers and investigations by the European Commission, the issue of ‘tax behaviour’ has taken center stage in the global public debate. Both multinational companies and governments find themselves increasingly under scrutiny, and in some cases even criticism, for pursuing tax policies and beha- viour that are beneficial to either or both but all too often come at the expense of other stakeholders.

There is an increasing awareness of the adverse effects of such aggressive tax strategies, including a substantial reduction in global tax revenues originating from multi- national companies, as well as uneven, and what many see as unfair and unsustainable, patterns of distribution of these revenues.

When companies do not pay their taxes where they actually add value to economies, it becomes increasingly difficult to sustain the favourable environments which attracted them to do business there in the first place. Furthermore, the growing public perception that multinational companies are allowed to determine where and how much taxes they pay, threatens to undermine the credibility of both the tax system and the principle of fair competition. In short, it looks like the debate about ‘good tax governance’ and ‘paying your fair share in taxes’ is here to stay.

The Tax Transparency Benchmark aims to contribute to this debate by presenting a clear picture of the state of socially responsible tax governance by multinational companies listed in the Netherlands. As a general trend it can be concluded that the companies in scope are becoming increasingly transparent on tax. Nevertheless, still more than one third of the examined companies ranks in the lowest transparency bracket, demonstrating that a lot of work remains to be done.