These were the slides I used for a talk to tax officials from Norway, Sweden, Finland, Denmark and Greenland this morning:

The Transition to Transparency

Nearly eight years since I spoke to you last: what has happened?

• A global financial crisis
• The end of tax havens (Gordon Brown)
• Tax Information Exchange Agreements
• Google
• The rise of the tax campaigner
• BEPS
• Country-by-country reporting
• FATCA
• Multilateral information exchange

Have we been on a transition to transparency?

• I hate to be a pessimist…..

Appearances are not everything

• Progress has not been smooth
• And has been marked by frequent failure
• Requiring new policy initiatives

The result is

• I think are there are significant remaining impediments to progress
• And much still needs to be done

Remember the world in 2008?

We were:

• Looking over an economic cliff the size of which we could not comprehend
• Still living in an era where a little voluntary cooperation was seen as the only solution to tax haven abuse
• And the European Savings Tax Directive was the frontier of innovation

And

• People like me were trouble making outsiders who many were all too happy to dismiss

The tax world has changed

I hope we can agree on that.

But:

• My point though is not to describe what has changed
• But to suggest a theory of change
• And to look at what this implies

The theory

• Change on this issue has always been incremental
• Each change, so far, has failed
• But in each change there has been a feedback loop, usually (to date) via the OECD
• And the combination of failure and feedback has, so far, resulted in a fairly rapid process of further change
• But so far it has not delivered success
• And I suggest that this pattern has some way to go as yet
• And the feedback loop may need to change before we get there

April 2009 - the changes

• The aim was to blame someone 'elsewhere' for what was happening on politician's home turf
• Tax havens were easy targets
• The OECD lists appeared like action
• But a target of 12 TIEAs was laughable
• And the truth was that TIEAs could not work, as a matter of fact
• This was politics, but not tax transparency

April 2009 - the failures

• TIEAs were mocked
• The black list was closed in days, and the grey list not long after
• The peer reviews convinced no one
• Occupy and UK Uncut made clear that this was not just an issue of evasion, but of avoidance as well
• The Google story went round the world
• The UK parliament made Google, Amazon and Starbucks totemic

The 2012 / 13 changes

• BEPS began in 2012
• David Cameron put it on top of the G8 agenda in 2013
• He accepted that this was a development issue
• Norway's patient funding of that argument paid off
• Country-by-country reporting topped the demands
• The Lough Erne Summit was the campaigners hey-day

The 2012 / 13 failures

• Developing countries largely excluded from the debate
• And from the data
• CBCR will exist, behind closed doors
• ‘Tax transparency, in secret'
• ‘Trust us, we're transparent: you just can't see it'
• Many other technical solutions are half hearted
• Arm's length pricing survives
• Corporation tax remains in its death throes
• There is no political solution for corporation tax in sight

The FATCA changes

• The US rocks the boat with FATCA in 2010
• BUT it is unilateral
• Most jurisdictions holding out against EU STD development smell the coffee and begin information exchange
• Even Luxembourg
• Austria would have been the last to fall
• The UK and others move to what I called ‘son of FATCA' deals with its havens
• The opportunity for the OECD to create proper multilateral information exchange to replace the bilateral era

The FATCA failures

• The US refuses multilateral exchange
  • And becomes the biggest tax haven in the world
• The U.K. demands transparency from its tax havens
  • And does not get it
• There is massive resistance to registers of beneficial ownership which are the pre-requisite of the system working
  • And places like the UK will produce sham registers
• The likelihood of meaningful data exchange on the tax non-compliant is very low
• The Panama Papers imply only the fools will be caught

The ongoing crisis

• There is a tax gap
  • But most countries will not calculate it
• There is a revenue authority resources crisis
  • But few countries will acknowledge it
• There is a crisis in company law enforcement
  • And no one even talks about it
• The accounting profession still produces accounts wholly unsuitable as a basis for tax
  • And get away with it
• Which means we are still 'just dancing in the dark'
  • Bruce Springsteen

So what is needed?

• Political will
• Investment of resources
  • Tax
  • Company law
• Substantially enhanced domestic information exchange regimes
• Massively enhanced tax accounting
  • Public CBCR
  • Tax Reporting Standards to identify the tax base
• Full transparency on all companies and trusts
• The training to use the data
  • Vitally

Why will we get change?

• The next financial crisis will make this happen
• Coming your way soon….
• It's overdue