The Principles offer a framework of good tax practice, including in the areas of tax management strategy, interactions with authorities, and reporting.
The Principles have been endorsed by businesses including Allianz, BHP, AP Moller – Maersk, Natura Cosméticos, Repsol, Safaricom, Royal Dutch Shell Plc, Unilever and Vodafone Group Plc.
Oxfam International said the Principles raise the bar on what constitutes responsible corporate tax behavior, while Tax Justice Network argued that the Principles are actually lowering the bar.
9 February 2018: The B Team, a global group for responsible business, released a report outlining responsible tax principles. The Responsible Tax Principles were developed in collaboration with leading companies, civil society organizations, institutional investors and international institutions.
The B Team is a global nonprofit initiative co-founded by Sir Richard Branson, Derek Handley and Jochen Zeitz. It brings together a group of global leaders from business, civil society and government to “catalyze a better way of doing business that prioritizes the well-being of people and the planet.” The Principles delineated in the report titled, ‘A New Bar for Responsible Tax,’ offer a framework of good tax practice, including in the areas of tax management strategy, interactions with authorities, and reporting. The Principles have been endorsed by businesses including Allianz, BHP, A.P. Moller – Maersk, Natura Cosméticos, Repsol, Safaricom, Royal Dutch Shell Plc, Unilever and Vodafone Group Plc.
The seven Principles proposed by The B Team are:
- Make boards accountable for tax policy;
- Comply with the tax legislation of the countries in which you operate and pay the right amount of tax at the right time, in the countries where you create value;
- Be transparent about the entities you own around the world and why;
- Develop cooperative relationships with tax authorities, based on mutual respect, transparency and trust, including by not bribing or inducing tax officials, government officials or ministers with the aim of obtaining more beneficial outcomes with respect to tax matters;
- Seek and accept tax incentives only where they are aligned with real business, and in the manner intended, and give governments data on impact “where appropriate”;
- Engage constructively in national and international dialogue with governments, business groups and civil society to support the development of effective tax systems, legislation and administration; and
- Provide regular information to stakeholders, including investors, policy makers, employees, civil society and the general public, about your approach to tax and taxes paid.
Welcoming the launch of the Principles, Winnie Byanyima, Executive Director of Oxfam International, said they have “raised the bar” on what constitutes responsible corporate tax behavior by setting a new standard for companies that claim to operate ethically. She invited all companies to meet these standards, adding that “truly forward-looking” companies should do even more.
Alex Cobham of Tax Network Justice, however, writes that the Principles “lack any hard criteria against which to evaluate progress.” Given the range of existing standards and proposals that do have such criteria, he writes that this makes the “new bar” proposed by The Responsible Tax Principles a lower bar. For example, on Principle 2, Cobham notes that the agreed G20/ OECD position of aligning declared profits with “real economic activity” rather than with “value creation” represents a clearer equivalent and it is thus stronger. On Principle 7, he suggests that other sets of principles, such as the OECD standard, allows for the comparisons needed to judge progress.
The B Team tax principles were launched ahead of the first global conference of the Platform for Collaboration on Tax, which took place on the theme ‘Taxation and the SDGs,’ from 14-16 February 2018. The Platform is a joint initiative by the International Monetary Fund (IMF), OECD, UN and the World Bank Group, and it is designed to foster cooperation and build consensus around responsible tax practice. [The B Team Press Release] [A New Bar for Responsible Tax] [Tax Justice Network Article] [Oxfam Press Release] [SDG Knowledge Hub Story on ‘Taxation and the SDGs’ Conference]