The multinational’s tax bill and transparency
3 maart 2008
However, companies should be aware that the public opinion may be critical and even suspicious. This is definitely the case today in The Netherlands. The claim that Dutch multinationals hardly pay any tax is nice material for news paper headlines. Parliament then jumps in and is keen to debate the issue. The fact that the reputation of the Dutch Tax Office is at a low due to all kind of failures in its system, is not going to get the multinationals off the hook. At the end of the day the tax issue may hit them. And therefore, whether multinationals like it or not, they will have to include tax on their corporate responsibility agenda. They have to be transparent on their tax policies, the amount of taxes they pay, and ideally also on where they pay these taxes. This is in line with the GRI Guidelines.
Multinationals should explain that the law is leading. But also that they can not neglect the opportunities of legal tax structures because it would undermine their competitive position.
There is no way to escape this issue, specially not for companies that claim that corporate responsibility is key to their strategy, or even part of their DNA. Corporate responsibility should not be a PR tool that addresses marginal issues while avoiding the difficult ones. But neither does sustainability not imply that the company should happily accept the unlimited tax hunger of governments. By way of “the comply and explain” mechanism (transparency) companies should become more vocal in this public debate.
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