The following briefly captures the responsible tax discussion at the recent ICGN conference in Amsterdam, a topic to which I will return more fully in later blogs. In large part this was an encouraging discussion, though there were clearly significant gaps in practical implementation.
Inevitably perhaps in a self-selecting group, investors were clear the issue matters: 89% say responsible tax is a consideration in investment decisions, and fully 95% say corporate philanthropy is not enough, that responsible companies must focus first on paying a fair level of taxes. Further, 87% believed that country-by-country tax reporting should be required of all companies — though the discussion in the room suggested that the practical experience of this was not always as valuable as the theory.
Yet, even among this enlightened group only 47% say that they definitely take responsible tax concerns into account when structuring their own investments. And while one Dutch pension scheme reported that it has stopped stocklending because it could no longer defend the dividend tax arbitrage implicit in this process any more, its representative noted that most of his peers are unaware that this is even an issue in stocklending.
It is clear that there is much work to do before fair tax is delivered in practice, and it becomes an issue that we address as well as just expecting them to.
See also: Fair tax reflections from investors II