9th October 2014

Perspective from the Danish Council for Corporate Responsibility on Tax and Transparency

By Lise Kingo, Chair

Agenda1. A welcomed conversation 2. The role of the Danish Council for Corporate Responsibility3. Tax on the agenda: What are the issues? 4. The business perspective: A difficult grey zone5. Current international guidelines6. Additional guidance aiming for clarity

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1. A welcomed conversation• Tax governance• Corporate tax morality• Fair tax• Global tax footprint• Total tax contribution• Tax governance• Tax charter• Tax code of ethics & conducts• Tax transparency

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2. Danish Council for Corporate Responsibility

• advises the government on issues that contribute to supporting CSR implementation by companies and authorities• initiates activities to promote CSR work by companies and

authorities

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Social responsibility • A company demonstrates social responsibility and creates

value for both business and society by addressing social, environmental and economic challenges in dialogue with its stakeholders and in accordance with internationally recognised principles for CSR.

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3. What are the issues?

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4. The business perspective• It is legal – is it also moral?• International operations vs national regulation• Competitive and responsible• Transparent, how?• Value creation – much more than corporate tax

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Tax policy – an exampleWe will pursue a competitive tax level in a responsible way by:

• Paying taxes due in all jurisdictions where we have a business presence

• Only participate in projects supported by a clear business rationale

• Continue to communicate and share our strategy with stakeholders

Novo Nordisk tax policy

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Code of Conduct – an example

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5. Current international guidelinesOECD Guidelines for Multinational Enterprises (2011):• Comply with both the letter and the spirit of the laws and

regulations in all countries the company operates in • Provide information necessary for correct determination of

taxesEU CSR strategy 2011-14:• Three principles for good tax governance: transparency,

exchange of information and loyal tax competitionEU Directive on Non-financial information (2014/2017): • Country-by-country reporting in forestry and extractive

industry

• Nyt EU regnskabsdirektiv:

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6. Additional guidance aiming for clarity • Three perspectives on tax….

Financial management – cost and complianceCSR – transparency and fairness Corporate governance – a responsibility of the board

• … require a collaborative approachTax professionalsCivil society organisationsDanish Committee on Corporate GovernanceDanish Council for Corporate Responsibility

• Expected outcomeBrief on issues and questions => principles on responsible tax•

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Principles on responsible tax Principles on responsible tax – could be about• Accountability:

ensuring that tax is paid in the country in which the economic benefits of the business arise and that any tax planning is secondary to the commercial purposes of a transaction • Transparency:

sharing dilemmas and risks more effectively; disclosure on taxation paid and associated liabilities• Consistency:

applying same principles and governance as the rest of the business, taking a global approach to taxation practices

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Thank youFor further information, please contact the secretariat: rfs@erst.dk