Norges Bank Investment Management, the management arm of Norway’s sovereign wealth fund, has detailed its tax conduct expectations from its portfolio companies.
Taxes should be paid where economic value is generated, NBIM said in a note. It added that company tax arrangements are a board responsibility and public country-by-country reporting is a core element of transparent corporate tax disclosure.
“Our expectations fall into two main categories: boards should adopt appropriate and prudent tax policies, and companies should be transparent about where they generate economic value,” it said.
NBIM recommended company boards take the lead in setting corporate tax priorities and disclosing their policy on tax, using Base Erosion and Profit Shifting principles as a starting point.
The note also addressed the perception that large corporates sometimes pay tax according to where it is most advantageous for them to report economic activity for tax purposes.
To alleviate this, the NBIM suggested that multinational enterprises could increase public awareness of their wider tax contribution.
“They should present the tax contributions that they make beyond taxation of their corporate income, including sales taxes, payroll taxes, customs duties, property taxes and environmental levies,” NBIM said.