Thursday, 2 April 2015

Multinationals should consider proposals for wider reporting of international tax arrangements

Multinational enterprises (MNEs) should consider the details of the discussion draft published on 31 March on disclosure of tax planning arrangements to tax authorities and, in particular, the potential extension of existing regimes to incorporate 'international tax arrangements'.

The discussion draft relates to Action 12 of the Base Erosion and Profit Shifting (BEPS) Action Plan agreed by the Organisation for Economic Cooperation and Development (OECD) with the G20 countries.

Action 12 concerns recommendations for the design of rules providing for disclosure of what is perceived as aggressive tax planning. Action 12 specifically includes:

  • Design of mandatory disclosure rules or a mandatory disclosure regime
  • A focus on international tax schemes
  • Coordination with work on cooperative compliance
  • Enhanced models of information sharing between tax administrations

Changes in international tax standards and other promised increases in cooperation between jurisdictions and alternative methods for addressing avoidance activity suggest a serious review of the costs and potential benefits is needed before the recommendation of any new disclosure regime for international tax arrangements.

Source & more info: PwC