It’s time for the UK to lead the way on multinational tax transparency

We’re calling on the UK government to mandate large multinational businesses operating in the UK to publish a breakdown of exactly how much income, profit and tax they are generating here and in every other country – otherwise known as “public Country-by-Country Reporting” (pCbCR).

At present, the vast majority of multinational enterprises refuse to disclose how much corporation tax they pay here or in any other country. This opaque reporting means we have no way of telling whether or not they are paying their fair share of taxes.

Greater transparency helps deter multinationals from shifting their profits to tax havens. Since the introduction of earlier pCbCR requirements for the European banking sector, evidence suggests that the number of subsidiaries of European banks in tax havens declined significantly.

In 2016, under all-party pressure from parliament, the UK government agreed that pCbCR was merited, but the power has never been implemented. Politicians said that we should wait for other countries to take action too.

Now that similar tax transparency measures are moving forward across the globe we say: don’t delay – it’s time to #ShowMeTheMoney and for all multinationals to lift the lid on the taxes they pay in the UK and around the world.

Campaign supporters

Our campaign is inspired by a number of pioneering responsible businesses that already publish a breakdown of profits and taxes on a country-by-country basis. These include multinationals accredited to the Fair Tax Mark, which are proud to say what they pay.

The UK’s All-Party Parliamentary Group (APPG) on Anti-Corruption and Responsible Tax, which includes politicians from right across the political spectrum, is an enthusiastic supporter of the call for legislative change; as are Oxfam and several other development and civil society groups.

Karina Dominey, Group Tax Manager, Lush 

“At Lush, we believe that we should pay a fair share of tax in each of the countries in which we operate. Our public country-by-country reporting means our stakeholders are fully informed about our tax contributions right across the world and demonstrates that our tax activity aligns with our responsible tax commitments.

It’s part of how we run our business in the simplest possible way with decisions being driven to serve our customers, to look after our staff and generate a profit, not by taking advantage of tax havens.

Lush are proud to be one of several businesses to have led the way with voluntary public country-by-country reporting and stand behind this campaign for all multinationals operating in the UK to follow suit.”

Dame Margaret Hodge MP, Chair of the APPG on Anti-Corruption & Responsible Tax

“The UK must join the new era of corporate tax transparency. As long ago as 2016, Parliament legislated to make large multinational businesses operating in the UK provide a breakdown of the income, profit and tax they pay wherever they operate.

So why do these powers remain unimplemented? Now that similar measures are progressing around the world and we risk falling behind, I urge government to press ‘go’.

A transparent tax system would mean we could finally follow the money and ensure that businesses are paying their fair share of tax, and that they are not cynically shifting profits and harming the taxpayer.”

Nigel Mills MP, Co-Chair of the APPG on Anti-Corruption & Responsible Tax

“The hard work has already been done on country-by-country reporting, so why not get on with it and modernise the way we tax across borders?

Large corporations around the world already disclose so much in their accounts anyway – adding basic information about the extent of their turnover, assets, employees and profit in each of the jurisdictions they operate in would hardly rock the boat.

It is not sensitive data that will harm their commercial interests, and requiring such disclosures will allow capital markets and other important stakeholders to make a better-informed assessment of a company’s economic performance.”

Six big reasons why the UK should say ‘yes’ to public Country-by-Country-Reporting

  1. A new global era of tax transparency is already dawning. In the US, investor pressure has led the Financial Accounting Standards Board (FASB) to approve enhanced tax disclosures; a move that followed signals from the US Securities and Exchange Commission for FASB to prioritise pCbCR. EU countries have already legislated for some limited country-by-country public reporting, with similar measures advancing in Australia.
  2. It will create positive ripples around the world. Much of the Global South, and Africa in particular, is locked out of global information exchanges on corporate tax data. This information is crucial for fighting illicit financial flows, which are thought to surpass aid flows and investment across Africa. Making this information public will give a significant boost to poorer nations’ ability to fight tax evasion.
  3. Important stakeholders will be much better placed to assess a company’s financial performance. Comprehensively implemented pCbCR significantly enhances the ability of stakeholders across the world, from investors to governments, to know whether a business is paying the right amount of tax, in the right place and at the right time. Investors are increasingly calling for pCbCR and urging multinational businesses to embrace such reporting as a core element of their ‘ESG’ credentials.
  4. The UK public supports greater tax transparency. Annual polling has found that for the past five years, three-quarters of the public agree that the UK should “take a lead and force multinational businesses to disclose how much income, profit and tax they pay in each country in which they operate.”
  5. Pioneering responsible businesses already voluntarily publish a breakdown of profits and taxes on a country-by-country basis. These include multinationals accredited to the Fair Tax Mark, which are proud to say what they pay.
  6. Aggressive corporate tax dodging continues to erode support for vital public services. Across the globe, 35% of multinational profits (US$1trn) are artificially shifted to tax havens each year, leading to a 10% reduction in corporate income tax revenue. Within this, the UK was found to suffer a staggering £64bn of profit shifting, leading to an estimated £12.5bn reduction in corporation tax revenues.

We are grateful to Funding for Social Change for their support in relation to our UK public Country-by-Country-reporting campaign.

Become Fair Tax Mark Accredited

Latest News

What is tax cloaking?

Like tax washing, where communication on certain issues is selected in a way that is misleading, tax cloaking is where some information is not presented at all.   For example, it may seem obvious that a business choosing to publish their financial statements would publish them in full, but many do not. Sometimes only a consolidated or abbreviated version is available …

Read more

Fair Tax Mark businesses top Danish tax governance ratings

Enhanced metrics inspired by the Fair Tax Foundation have helped Fair Tax Mark accredited businesses flourish in this year’s Økonomisk Ugebrev Tax Governance Rating. The Danish publication recently released their 2024 rankings, which score companies on their responsible tax conduct. Fair Tax Mark business Ørsted took the top spot for Danish large caps, along with Vestas, with 12 points out …

Read more

Tax Responsibility and Transparency Index launches to benchmark companies

After 12 months of consultation and development, stakeholders from civil society, business and investment came together on 19 April at the European Parliament in Brussels for the launch of the Tax Responsibility and Transparency Index. The Index has been co-developed by the Fair Tax Foundation and leading European corporate responsibility business network CSR Europe and acts as a high-bar benchmark …

Read more