Tax Planning: An Opportunity to Build Trust
Certainly, there are advantages to making tax planning part of your business strategy: You can get a handle on tax consequences before they happen (and steer clear of the ones that would be extraordinarily painful).
You can plan operations in low-tax jurisdictions and losses in high-tax ones, and you can make the C-suite and outside investors aware of your risk position.
These days, you can’t help but notice that stakeholders’ interest in a company’s tax affairs is certainly growing—but that doesn’t seem to be an issue for Irish companies, who appear to be big fans of tax transparency.
While tax disclosures aren’t mandatory in Ireland, many companies volunteer them. According to the Irish Times, a recent survey showed that 13 of the 24 companies listed on the main market of the Irish stock market (Euronext Dublin) published documents revealing their tax strategies.
And that’s not all they offered up: All 24 companies voluntarily revealed facts about their tax management and tax risk positions, even indicating the controls they had put in place. A majority of those companies—77%—say that their tax strategies support the companies’ overall business strategies.
The Benefits of Tax Transparency
Tax transparency, no doubt, builds trust between a taxpayer and tax authorities, but now tax executives are strategically using it to build trust in their own boardrooms. Now, that really is strategic.