Tax justice and transparency are pressing issues of our time and play a key role in clients’ social responsibility considerations. The cum-ex scandal and the Panama Papers leaks have cast a stark light on the tax strategies of multinational businesses, leading to closer scrutiny of non-financial reporting, transparency, sustainable governance and tax arrangements.
Legislators are also increasing efforts to tighten tax legislation with the aim of regulating environmental and social impacts and taxing unwanted behaviour. And international tax planning has been fuelling the debate about distributive justice for years, with current topics including bans on tax deduction, add-back taxation, the German Defence against Tax Havens Act (“Steueroasenabwehrgesetz”) as well as the OECD’s Pillar I and II tax reform proposals – all instruments legislators have already introduced or plan to use to curb aggressive tax planning. The EU’s Green Deal and the many associated tax measures, such as the proposed taxation of plastics and CO2 emissions, add to the numerous challenges companies face.
It is therefore essential that businesses adopt robust risk management practices to meet sustainable tax planning goals. Tax compliance management systems are an effective tool for ensuring appropriate taxation and compliance with ESG tax requirements – allowing businesses to identify, assess and eliminate ESG risks.
We advise companies on all of these aspects – helping them achieve their sustainability goals in line with current tax rules and regulations.