handbook-tb

Diane Ringand disclosure regarding multinational businesses are essential.Countries face a number of barriers to achieving this level of transparencyand disclosure. First, domestic law may not currently requireadequate reporting regarding financial accounts, cross-border relatedpartytransactions, foreign financial assets or foreign business activities.The final recommendations emerging from the OECD project onBEPS, in particular those grounded in Actions 12 and 13, may proveespecially useful as guides for countries exploring domestic reform.Additionally, the Global Forum peer review process provides a mechanismfor both assessing and facilitating domestic improvements intransparency and disclosure.Second, countries may face domestic enforcement impedimentsto their effective acquisition and use of information. Developing countriesthat are resource-constrained (for example, limited audit staff,limited international tax expertise, limited technological resources)might find it difficult to seek and acquire the information necessary toeffectively audit all of the major multinational businesses operating intheir jurisdiction. To the extent that proposed reforms can ease any ofthese constraints or burdens, they may be particularly useful to developingcountries. Conversely, if reforms require resources or treatyrelationships not currently available to many countries, their formaladoption will likely have less impact on resource-constrained States.Third, effective responses to BEPS will require engagement withthe broader tax community. Information can be sought directly fromtaxpayers, but often important information will be needed from othercountries. Thus, the crucial question is whether a State has treaty relationships(bilateral, TIEA or other) with the countries from which itis most likely to need information. If the transparency and disclosurereforms rely less on bilateral relationships and more on multilateralapproaches, jurisdictions with more limited treaty networks can morereadily enjoy the benefits of the new reforms.Among the most prominent proposals for transparency and disclosurereforms currently under way are the documentation reformsenvisaged in Action 13 of the OECD Action Plan BEPS (focused onimproved reporting for transfer pricing documentation and the globalactivities of a multinational group). The proposed reporting packageunder Action 13 includes: (a) the master file (standardized global566