G20-Germany-Hamburg-2017

ADVOCACY
• That public disclosure will constrain corporate
behavior. The UK requirement to publish a tax
strategy, say, may focus more attention of the Board
on the tax profile, and so increase focus on the
company’s tax position. However, public disclosure
shouldn’t be needed to ensure this. And the objective
of disclosure should be to ensure that published
information is clearly understandable and focused
on the tax risks of the company. In contrast, the
publication of the BEPS Action 13 Country-by-Country
reporting template – something clearly intended to
be used only by the tax authority alongside other
information – would appear to fail this test.
• That some companies already voluntarily publish
similar information. The decision about whether to
publish, and what information to include, is made
by each business. It is typically covered as part of
a larger discussion that may be targeted at various
stakeholders, including customers, shareholders and
regulators. The data that are shared are relevant to the
company, its business and its stakeholders. However,
the fact that some businesses publish data does not
mean there is a benefit in mandating that all should
provide disclosure. Also, in a world where financial
statements are already long and complex, extra
information may actually lead to less transparency,
with too much data undermining clarity.
Any public disclosure again risks the exposure
of commercial information, and should therefore be
considered with extreme caution.
CHRIS
SANGER
Global Tax
Policy Leader
EY
www.ey.com/
gl/en/services/tax
Building positive engagement
The transparency of tax information to tax
authorities is ultimately a means to an end:
that taxes are duly paid. The G20 should use
the time taken to evaluate the success of its
new transparency requirements to reinforce the
cooperative compliance concept championed
by the OECD. The detailed understanding of
business activity obtained by a tax authority under
cooperative compliance can help easily explain
apparent anomalies and avoid needless conflict.
Likewise, a robust understanding by the taxpayer
of the concerns of tax authorities can help ensure
that responses address the issues at hand, securing
efficient resolution and engendering more trust.
The sharing of tax information can potentially
improve trust between taxpayers and tax authorities.
As part of the G20’s work on tax and growth, a
recommitment to building trust would be well
received. Ultimately, communication remains a
human process and open dialogue will resolve
queries far more efficiently than any other route.
As the G20 considers the current tax
environment, it should reflect on the changes that
BEPS has, and is set to, deliver to the world of tax
transparency. Such changes will take time to work
and need to be given that time.
The views reflected in this article are the views of
the author and do not necessarily reflect the views
of the global EY organisation or its member firms.