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Danish Fund Stresses Tax Transparency In Investment Strategy

by Ulrika Lomas,, Brussels

07 November 2017

Danish pension fund Sampension has said that it intends to apply a greater focus on corporate tax transparency as part of its overall investment strategy.

The fund – Denmark's third-largest – said in a recent announcement that tax transparency will be one of the criteria used by fund managers when applying its "responsible" investment policy.

Sampension made the announcement after research by Vigeo Eiris, a provider of research on environmental, social, and governance issues, concluded that only 2.5 percent of a sample of 1,139 companies reported comprehensive tax information in line with OECD recommendations on country-by-country reporting.

This study found that almost 10 percent of companies did not disclose any information on their tax payments, while just over 44 percent provided partial information, usually limited to the gross amount of tax that they pay.

Fewer than half of companies provide a breakdown of the taxes they pay by country or region, Vigeo Eiris said, with one third of these companies reporting less than half their activities.

Commenting on the move, Hasse Jorgensen, Sampension CEO, said: "The lack of openness about taxation among multinational companies is worrying and we see increased transparency as an important means of ensuring that companies operate within the framework of existing legislation. This is the premise [upon which] we can invest customers' money in these companies."

Sampension's Board of Directors formulated requirements for ethical corporate tax behavior as part of its broader investment policy in 2014. These stipulate that tax planning structures which are a "clear contradiction" to the intent of the law are to be avoided.

Sampension said it has collaborated with Vigeo Eiris for several years to screen its portfolio of company investment to ensure that it sticks to its policy of responsible investment.

TAGS: environment | compliance | tax | investment | pensions | Denmark | tax avoidance | law | legislation | tax planning | transfer pricing

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