UK: Multinationals must publish UK tax strategy in 2017 | KPMG | GLOBAL

UK: Multinationals must publish UK tax strategy in 2017

UK: Multinationals must publish UK tax strategy in 2017

This is a reminder for multinational entities with a UK presence to publish their UK tax strategy before the end of 2017. If a qualifying multinational does not publicly disclose information relating to its UK tax strategy, it may face penalties and reputational implications.

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Multinational entities that are subject to the disclosure rules are those that have:

  • Annual global revenue of over €750 million and a UK taxable presence (i.e., the mandatory UK reporting requirement under country-by-country reporting)
  • UK revenue of over £200 million or UK gross assets that exceed £2 billion in valuation

Beginning in 2017, multinational entities subject to the disclosure rules must publish their UK tax strategy publicly online, and set out their strategy document (either on a stand-alone basis or as a self-contained part of a broader document). The tax strategy must be made available online until the following year's strategy is published.

Among other things, the strategy must incorporate:

  • The company's or group's approach to risk management and governance arrangements in relation to UK taxation
  • The level of risk that the company or group is prepared to accept in relation to UK taxation
  • The company's or group's approach to its dealings with UK tax authorities

The disclosure requirements apply as of the first accounting period starting on or after 15 September 2016, and disclosures must be made by the end of the tax period (e.g., companies that have a 30 September 2017 year-end must publish their UK tax strategy by 30 September 2017).

There are penalties for non-compliance with the disclosure rules as well as possible reputational risk and damage.

 

Read an August 2017 report prepared by the KPMG member firm in Canada

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