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FASB Exposure Draft on Proposed Accounting Standards Update – Income Taxes

Letter to the Financial Accounting Standards Board, 25 May 2023.

30 May 2023

We refer to the Financial Accounting Standards Board (FASB)’s public consultation on the Exposure Draft of the Proposed Accounting Standards Update on Income Taxes (Topic 740) Improvements to Income Tax Disclosures published on 15 March 2023. We welcome the opportunity to contribute our perspective.

Norges Bank Investment Management (NBIM) is the investment management division of the Norwegian Central Bank (Norges Bank) and is responsible for investing the Norwegian Government Pension Fund Global, with the objective of ensuring the highest possible return. NBIM is a globally diversified investment manager with 1,262 billion USD in assets under management as of the end of 2022.

We have laid out our expectations of companies on tax and transparency in a public expectation document[1]. As an investor, NBIM expects multinational enterprises to exhibit appropriate, prudent and transparent tax behaviour. In line with the G20/OECD Principles of Corporate Governance, our starting point is that company boards should oversee company tax strategies and planning. Company boards should also discourage practices such as aggressive tax avoidance, which do not contribute to the long-term interests of the company and its shareholders.

Our expectations to companies are informed by our view that business operations driven by tax planning rather than long-term value creation may be more vulnerable to enforcement or regulatory changes. Institutional investors benefit from well-functioning, consistent, predictable and transparent tax reporting frameworks. To promote consistency and reduce uncertainty, we support international standards for the disclosure of taxes paid to governments. As a user of financial statements, we support FASB’s objectives of enhancing the transparency and decision usefulness of income tax disclosures. We welcome the improvements to the rate reconciliation disclosures, as well as the requirements for more granular information on income taxes paid. As detailed below, we believe requirements for additional country-by-country information would further enhance the utility of the proposed disclosures.

Our comments are focused on the specific questions listed below (see pdf). We thank you for considering our perspective and remain at your disposal should you wish to discuss these matters further.

Yours sincerely,

Carine Smith Ihenacho         

Chief Governance and Compliance Officer


Wilhelm Mohn,

Global Head, Corporate Governance

Download the letter (pdf)