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In the Talk About Tax game, you are able to use different stakeholder perspectives to explore tax dilemmas. Our virtual host, Tax-E, shows you three tax dilemmas: Tax Transparency, Tax Planning and Tax & ESG.
PwC wishes to offer guidance in this societal and transformational debate. This is why we are working together on a sustainable and future-proof society. We would be pleased to share with you our vision and approaches to the dilemmas discussed.
If you have any questions or would like to play the game and continue the discussion, please contact your PwC adviser.
Many stakeholders, including investors, politicians, boards and others, are asking for transparency around tax. This is not a goal in itself, but helps stakeholders to understand the company’s approach to tax obligations, its contribution to society through tax payments and it enables comparison of tax data. PwC supports the trend of increased tax transparency as it increases accountability for tax behaviour and facilitates the discussion about sustainable value creation for stakeholders and communities on earth.
The discussion about tax planning or tax avoidance seems straightforward but there is a lot more involved. What is aggressive tax planning, what is avoidance and what are valid reasons for tax planning? What if a taxpayer uses planning to reduce or prevent double taxation and how do stakeholders respond to that? Or what if a taxpayer moves its R&D department to a country with attractive R&D tax incentives? What responsibility do governments, tax authorities, taxpayers and tax advisors have in this respect? PwC considers it important to formulate a view on responsible tax planning. In essence, such planning needs to be explainable to stakeholders, have a strong basis in law and fit with the organisation’s business strategy, including its values and purpose. Not an easy task but important as taxes are crucial for the funding of society, including the public goods and services people on earth make use of.
The impact of ESG is rapidly growing. Taxes play an important part in the ‘E’ with its environmental taxes and incentives. In the ‘S’ with tax contributions to society but also topics like diversity & inclusion, remuneration and the workforce of the future. And, last but not least, tax is part of the ‘G’ with strategic alignment between tax and sustainability, board oversight and transparency reporting. So, tax plays a role in the sustainability agenda of businesses and politicians around the world, and is already taken into account in ESG ratings. In PwC’s view, tax is no longer a cost factor only, but also a contributor to socio-economic cohesion, sustainable value growth and long-term prosperity.