handbook-tb

Transparency and disclosureAlthough all countries should be concerned about the impact ofaggressive tax planning structures and transactions on their tax base,many developing countries may find that their more immediate BEPSthreat comes from “straightforward” profit shifting. In that case, therecommendations under Action 13 may have more significant, immediaterelevance to such countries. That said, if developing countriescurrently experiencing BEPS through more traditional transfer pricingmechanisms successfully curb this loss of tax revenue, they mayfind that taxpayers shift to more sophisticated techniques for reducingtheir tax bill. At that point, Action 12 would take on a greater role inthe response of developing countries to BEPS.3.5 Summary of the OECD project on BEPS andtransparency and disclosureThe OECD Action Plan on BEPS includes two action items directlybearing on transparency and disclosure. Action 12, which will bedelivered in 2015, seeks to require disclosure of aggressive tax planning.Many of the issues and concerns that have emerged in the formulationand evaluation of Action 13 over the past year will likelybecome important again in the context of Action 12. Perhaps of greaterimportance for developing countries at present are the recommendationsunder Action 13 pertaining to documentation of transfer pricingand the multinational group. This action item has been the subject ofextensive debate and comment and its three-part reporting package(master file, CbC template and local file) could play a very significantrole in developing country tax enforcement. Additionally, Action 11might play a role in the future to the extent that its anticipated collectionof broad-level data regarding the success of strategies targetingBEPS provides guidance on future reform.4. Other new developments in transparency anddisclosure4.1 OverviewThe OECD project on BEPS is the most expansive effort to addressbase erosion and profit shifting, including through transparency and541