Effective 10 September 2026, FAR has issued Recommendation RevR 21 “The Auditor’s Statement on the Income Tax Report” (Revisorns uttalande om inkomstskatterapporten), providing authoritative guidance for auditors on the special statement required under Chapter 7, Section 4 of the Swedish Annual Accounts Act (1995:1554) for entities subject to public country-by-country reporting (CbCR) obligations. The recommendation addresses the auditor’s responsibilities when the income tax report is prepared under GRI 207: Tax 2019 or equivalent frameworks, clarifying the scope of assurance procedures, materiality considerations for tax jurisdiction disclosures, and the form of the auditor’s conclusion (reasonable vs. limited assurance). RevR 21 replaces the previous interim guidance from 2023 and aligns with ISAE 3000 (Revised) and the EU’s Directive 2021/2101 on public CbCR. It applies to financial years beginning on or after 1 January 2026, with early application permitted.
Key Takeaways
- Assurance Scope: Auditors must evaluate whether the income tax report fairly presents the entity’s tax strategy, governance, and jurisdiction-level tax payments in accordance with the applicable reporting framework, requiring substantive testing of tax return reconciliations.
- Materiality Guidance: RevR 21 introduces a dual materiality threshold: quantitative (tax expense >5% of profit before tax per jurisdiction) and qualitative (presence in tax haven lists, related-party transactions), expanding traditional financial statement materiality concepts.
- Reporting Format: The auditor’s statement must explicitly reference the reporting framework (e.g., GRI 207), identify the tax jurisdictions covered, and state whether reasonable or limited assurance is provided, with mandatory emphasis-of-matter paragraphs for uncertain tax positions exceeding 10% of group tax expense.
Disclaimer: This article is compiled and summarized by the AI based on publicly available information and is for general information purposes only. It does not constitute any form of formal tax advice, legal opinion, or basis for performance. Please consult a qualified professional tax advisor or legal counsel for tax advice.
Source: Read Official Announcement