If the OECD was really serious about tax avoidance it would back country-by-country reporting

Posted on February 1 2011

The OECD has issued a press release saying:

Aggressive tax planning is a major risk to the revenue base of many countries. As shown by some recent cases and settlements, numbers are vast. Countries have developed a number of strategies to deal with aggressive tax planning. The underpinning of any such strategy is to ensure the availability of timely, targeted and comprehensive information, which traditional audits alone can no longer deliver. The availability of such information is important to allow governments to identify risk areas in a timely manner and be able to quickly decide whether and how to respond, thus providing increased certainty to taxpayers. To be effective, tax administrations are moving closer to working in real time. Several countries have therefore introduced complementary disclosure initiatives aimed at improving their capability to identify and quickly respond to aggressive tax planning.

As they then say:

This report, approved by all OECD members, shows how countries are doing this — tackling aggressive tax planning through improved transparency and disclosure. It covers a range of approaches from mandatory disclosure rules to forms of co-operative compliance.

But there's a problem - which is that if the OECD was really serious about tax avoidance internationally by multinational corporations then it would back country-by-country reporting - and to be candid, despite having a working group on the subject it seems to me it is doing all it can to block progress on this issue.

So the words ring hollow. If Jeffrey Owens is serious he has to do three things:

1) Give civil socitety equal representation on his working group on country-by-country reporting

2) Allow civil society to take expert representation with them - a privilege only granted to business right now

3) Resource those from developing countries who want to be represneted but cannot afford to turn up through lack of funding.

Then I'll believe the OECD is really serious about multinational corporation tax avodiance. Until then it's all lip service.

PS There's a curious little foot note that says:

For instance, based on its disclosure rules for tax avoidance transactions, the UK was able to cut off GBP 12 billion in avoidance opportunities.

But of course corporates deny my claim that this practice is prevalent.

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