Executive Summary

For the fourth consecutive year, we assisted VBDO in conducting the Tax Transparency Benchmark. On this website we present the results of the 2018 edition, in which 76 Dutch companies are ranked on the level of transparency they provide on tax. The aim of the benchmark is to enhance the existing understanding of corporate tax responsibility and to inspire how to communicate comprehensively on tax matters in publicly available documentation.

The average transparency rating of the companies in scope increased from 36% in 2017 to 39% in 2018. This is a positive trend but also shows that there is still quite some ground to cover as the average score is still below 50% of the total points. Furthermore, we are content to report that 68% of the companies provided feedback on their own results. The companies that provided feedback are mostly companies that scored higher on the benchmark.

Ranking Company name Listing Score
1-3 Aegon AEX 23
1-3 Unilever AEX 23
1-3 AMG AMX 23
4 Van Lanschot Kempen ASCX 22
5-7 Rabobank - 21
5-7 NN Group AEX 21
5-7 Wessanen ASCX 21
8-11 DSM AEX 20
8-11 ING Group B.V AEX 20
8-11 Vopak AEX 20
8-11 Vastned ASCX 20
12-14 KPN N.V. AEX 19
12-14 RelX Group AEX 19
12-14 Nedap ASCX 19
15-16 Ahold Delhaize AEX 18
15-16 ASR AEX 18
17-21 Heineken AEX 17
17-21 Shell AEX 17
17-21 Grandvision AMX 17
17-21 PostNL AMX 17
17-21 Ordina ASCX 17
22-29 ABN Amro AEX 16
22-29 ASML AEX 16
22-29 Arcadis AMX 16
22-29 Fugro AMX 16
22-29 Wereldhave AMX 16
22-29 Binckbank ASCX 16
22-29 Brunel ASCX 16
22-29 Kendrion ASCX 16
30-32 Wolter Kluwer AEX 15
30-32 Flow Traders AMX 15
30-32 Royal BAM Group nv AMX 15
33-36 Signify (former Philips Lightning) AEX 14
33-36 Unibail-Rodamco AEX 14
33-36 IMCD AMX 14
33-36 TKH Group AMX 14
37-40 Achmea - 13
37-40 Randstad NV AEX 13
37-40 Royal Philips AEX 13
37-40 Boskalis AMX 13
41-42 Aalberts Industries N.V. AEX 12
41-42 TakeAway AMX 12
43-45 Aperam AMX 11
43-45 TomTom AMX 11
43-45 Beter Bed ASCX 11
46 Corbion AMX 10
47-52 ASM international AMX 9
47-52 SBM Offshore AMX 9
47-52 Sligro AMX 9
47-52 For Farmers ASCX 9
47-52 Heijmans ASCX 9
47-52 Kas Bank ASCX 9
53-54 Akzo Nobel AEX 8
53-54 ArcelorMittal AEX 8
55-56 Altice AEX 7
55-56 BE Semiconductor Industries N.V. AMX 7
57 NSI N.V. ASCX 6
58-62 Air France KLM AMX 5
58-62 OCI N.V. AMX 5
58-62 Accell Group ASCX 5
58-62 Amsterdam Commodities ASCX 5
58-62

Sif Holding N.V.

ASCX 5
63-67 Gemalto AEX 4
63-67 Basic-Fit ASCX 4
63-67 Kiadis Pharma N.V. ASCX 4
63-67 Koninklijke VolkerWessels NV ASCX 4
63-67 Lucas Bols ASCX 4
68-69 Avantium ASCX 3
68-69 Pharming Group ASCX 3
70-75 Galapagos AEX 2
70-75 Eurocommercial AMX 2
70-75 Intertrust AMX 2
70-75 WDP AMX 2
70-75 Hunter Douglas ASCX 2
70-75 ICT Group ASCX 2
76 Fagron ASCX 1

Award

The winner of the Tax Transparency Award 2018 is Aegon. This company is the top-scoring company in the benchmark and scored above average on all good tax governance principles as published by VBDO and Oikos in 2014. One of the complimented items was that Aegon partially published country-by-country information, such as information on FTE’s and earnings before income tax. Further, Aegon provides a detailed description of how the implementation and execution of the tax strategy is monitored. 

As mentioned in last year’s Tax Transparency Benchmark, the developments surrounding transparent reporting are moving fast. In this context, it was mentioned that VBDO would conduct a thorough overhaul of the Tax Transparency Benchmark methodology for the 2018 benchmark, including the feedback received from many of the participating companies. This resulted in a significant change in the methodology compared to last year, which also implies that a proper comparison with the average transparency rating of the companies in scope with last year’s benchmark cannot be made. Below, we outlined the most significant conclusions and recommendations for each principle of good tax governance, as published by VBDO and Oikos in 2014. In addition, the table below provides an overview of the percentage of companies that scored per principle of good tax governance.

Good Tax Governance Principle % companies that scored per principle

A. Define and communicate a clear strategy

44%

B. Tax must be aligned with the business and is not a profit centre by itself

41%

C. Respect the spirit of the law. Tax-compliant behaviour is the norm

54%

D. Know and manage tax risks

37%

E. Monitor and test tax controls

31%

F. Provide tax assurance

15%
  39%

A. Define and communicate a clear strategy

  • 78% of the companies communicate their view on tax via a tax strategy and/or tax policy.
  • Half of the aforementioned companies communicate that the tax strategy is aligned with the organisational values, the business strategy and sustainability strategy.

Although most of the companies communicate their view on tax via a tax strategy and/or policy, there is room for further improvement in communicating that the tax strategy is aligned with the organisational values, the business strategy and the sustainability strategy to show stakeholders that tax is not seen as an isolated business component.

Furthermore, we would like to encourage companies to provide evidence to stakeholders that the approach to tax is discussed and approved at board level by being transparent on the sign off of the tax strategy by the (executive) board.

B. Tax must be aligned with the business and is not a profit centre by itself

  • 92% of the companies provided an effective to statutory tax rate reconciliation, while 26% provided a sufficient narrative explaining the elements of the reconciliation causing the difference.
  • Only 11% of the companies (partially) provided information on a country-by-country basis from which can be derived whether taxes are paid where value is created.

We noticed that only little country-by-country information is provided, while this could provide stakeholders with relevant insights in the company’s scale of activity and its approach to taxes and payments to governments across the tax jurisdictions in which they operate.

Furthermore, we recommend companies to add a narrative description to the effective to statutory tax rate reconciliation to provide (non-tax specialist) stakeholders with more background on the difference between those two.

C. Respect the spirit of the law. Tax compliant behaviour is the norm

  • Companies scored best on this principle.
  • 92% of the companies have a whistleblower policy in place.

Although most of the companies have a whistleblower policy in place, we recommend companies including a special paragraph relating to taxes in their whistleblower policies, to ensure that employees and stakeholders can report concerns about unethical or unlawful tax-related behaviour and/or activities that compromise the company’s integrity in relation to taxes.

Furthermore, to ensure stakeholders that the company’s tax strategy is effectively embedded in the organisation, we recommend companies to report on training programmes in place for employees on how to deal with tax (dilemmas).

D. Know and manage tax risks

  • Although 70% of the companies report on tax risks, including: financial, regulatory and/or reputational risks, only half of these companies, being 34%, describe tax risks in detail.
  • Only 7% of the companies describe the role of technology for tax relevant data management.

To provide stakeholders with a better understanding of the potential and actual risks involved and how these risks are managed within the organisation, we recommend companies to elaborate more detailed on tax risks, including their tax risk appetite and risk response, in publicly available documentation.

From a tax risk management perspective, it is crucial that tax relevant data is correct and complete. Technology can be used to improve the management of tax relevant data and therefore, we recommend companies to communicate on this topic as well.

E. Monitor and test tax controls

  • 30% of the companies describe how tax risks and controls are tested and monitored.
  • 14% of the companies describe how the implementation and execution of the tax strategy is monitored.

By communicating on the monitoring processes, the stakeholders are informed on the proper execution of the tax strategy and whether the company is in control of tax. In this respect, we note that there is quite some ground for improvement.

F. Provide tax assurance

  • Only one company (Kendrion) provides a tax in-control statement.
  • 4% of the companies provide third party tax assurance to stakeholders.

Communicating about the (external) review of your tax function provides additional comfort to stakeholders. This could be done by communicating on increased board involvement (tax in-control statement), implementing checks and balances with the tax authorities (co-operative compliance program) or supervision by a third party (third party tax assurance).

Contact us

Eelco van der Enden

Partner, PwC Netherlands

Tel: +31 (0)88 792 51 38

Dave Reubzaet

Director, PwC Netherlands

Tel: +31 (0)88 792 14 60

Evita van der Aar-Melger

Manager, PwC Netherlands

Tel: +31 (0)88 792 70 59

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