handbook-tb

Transparency and disclosure1.4 Pervasive questions in transparency and disclosureRegardless of the specific mechanism for providing information to taxadministrators, a number of universal questions arise: (a) What typeof information must be provided? (b) How difficult will it be for thetaxpayer to provide that information? (c) How will the informationbe provided? (d) What kind of technology and infrastructure will beneeded by the taxpayers and the country to implement this system?(e) To whom will the information be distributed? (f) What are thepermissible uses of the information? (g) Does the country have thecapacity to meaningfully use the information? and (h) How will dataprotection and taxpayer privacy be ensured? The success, failure andimpact of a given regime for providing tax information will dependsignificantly upon the responses to these concerns. That said, there isno single appropriate response to these questions. By examining eachof the new emerging information regimes, as well as the existing ones,against the backdrop of these questions, a country can determine itsown most effective path towards appropriately protecting its tax base.2. Transparency and disclosure in the current tax world2.1 OverviewRecent efforts to ensure that countries have access to the informationneeded to meaningfully and effectively implement their tax laws havefocused on the goals of “transparency” and “disclosure.” These termsappear in the OECD Action Plan on BEPS 3 and a variety of relateddocuments and commentaries. These two terms are distinct from therelated phrase “exchange of information”; thus, it may be useful tospecify their meaning. All three play a critical role in guaranteeingthat countries have the needed information.2.1.1 TransparencyThe term “transparency” reflects the idea that a country needs tounderstand how a taxpayer is conducting its business, structuring its3OECD, Action Plan on Base Erosion and Profit Shifting (Paris: OECD,2013), available at http://www.oecd.org/ctp/BEPSActionPlan.pdf.499