handbook-tb

Protecting the tax base of developing countries6.2.3 Developing country perspectiveFrom the perspective of developing countries, the information thatwould become available from the increased reporting requirementswould certainly be useful in properly assessing MNEs doing businessin their jurisdictions. However, there are a number of important policyissues to be considered. First, the country must have the appropriatedomestic legislation for it to gather the required information from itstaxpayers. In addition, to the extent that foreign multinationals preparemaster files and CbC templates under the guidance of the homeoffice, there must be some mechanism for other countries, in particulardeveloping countries, to obtain the information contained in masterfiles and CbC templates. There are also issues of confidentiality regardingcertain information that must be taken into account. More broadly,there is the issue of balancing the compliance burden of informationreporting on taxpayers against the usefulness of the information fortax administrations. The OECD Report on Addressing BEPS to theG20 Leaders indicated that there was substantial disagreement amongthe countries involved in the OECD project on BEPS as to exactly howthis balance should be struck. 22Another important policy issue on which there is disagreementis the extent to which the information developed under the CbC rulesshould be restricted to tax administrations, to governments more generally,or available to the general public.6.3 Automatic exchange of informationIn addition to the work on transparency and disclosure undertakenin connection with the OECD project on BEPS, the G20 and theGlobal Forum on Transparency and Exchange of Information for TaxPurposes have been active in developing a new international standardfor automatic exchange of information (AEOI). The basic structureof this project is that participating countries would require localbanks and financial institutions to obtain information on financialaccounts, which they would make available to the local tax authorities;they, in turn, would provide that information on an automatic22OECD, Addressing Base Erosion and Profit Shifting, supra note 1, at 27.25