The Power of Transparency

Tove Maria Ryding

Eurodad

Tax for Development - The Role of

European Policy Makers
Different types of transparency
- For the public:

Country by Country Reporting Beneficial Ownership

Different types of transparency
- For tax administrations:

Automatic information exchange

Different types of transparency
- Country-by-country reporting: Would give us a “map” of
multinational enterprises – showing where they pay taxes, where
they make profits, where they have subsidiaries, employees, etc.
= We can expose tax dodging and demand fair taxation.
- Beneficial Ownership: Would show us who owns shell-companies,
secret trusts, etc. = Less tax evasion
- Automatic information exchange: Would mean that tax
administrations receive information and could find hidden bank
accounts in ex. Switzerland = More tax income
What progress are we seeing?
- Country-by-country reporting: Capital Requirements Directive
gave us full and public country by country reporting for banks in
the European Union.
- Beneficial Ownership: Is right now being discussed in the EU – we
might see a decision before the end of 2014. Public registries are
an option!
- Automatic information exchange: FATCA (for the US) and the
“Offshore Leaks” led to EU regulation and a G20/OECD standard.
Who is driving the change?
- Country-by-country reporting: Capital Requirements Directive
gave us full and public country by country reporting for banks in
the European Union. European Parliament + investigative journalists
- Beneficial Ownership: Is right now being discussed in the EU – we
might see a decision before the end of 2014. Public registries are
an option! European Parliament
- Automatic information exchange: FATCA (for the US) and the
“Offshore Leaks” led to EU regulation and a G20/OECD standard.
US, followed by EU and G20 countries + investigative journalists
What progress are we not seeing?
- Country-by-country reporting: Public CBCR for all sectors and all
regions
- Beneficial Ownership: Public BO information (except perhaps in
the EU – if the member states agree to the European Parliament
proposal)
- Automatic information exchange: Automatic information
exchange with the poorest countries. Due to requirements of
“reciprocity” and a lack of political will to give them information.
The role of OECD and G20…
According to themselves:

- ”Major step forward for transparency” – OECD, 2014 (about the

new OECD standard for country-by-country reporting)
- ”You multinationals stand ready – it’s over!” – Pascal Saint-Amans,
2014 (about the outcomes of year one of the OECD process on base
erosion and profit shifting (BEPS))
- “The era of banking secrecy is over” – G20, 2009
- “What we are witnessing is nothing short of a revolution. By
addressing the challenges posed by the dark side of the tax world,
the campaign for global tax transparency is in full flow.” - OECD
Secretary-General Angel Gurría, 2009
The role of OECD and G20…
The other side of the story:

- ”Major step forward for transparency” – The proposal has a good

template, but by demanding ”confidentiality”, it is actually to roll
back the EU directive and make public CBCR confidential
- ”You multinationals stand ready – it’s over!” – ”transparency is
great, but it doesn’t mean that the information should be
everywhere... We have challenges in terms of making sure the
information is protected, is held confidentially, and is shared only
with tax administrations, but that this process is done in an
efficient, timely manner. If the process doesn’t happen quickly,
pressure may well grow to make the information public”.
- “The era of banking secrecy is over” (2009) Obviously not.
What should policy makers do?
- Walk the talk and don’t misinform the public
- We need progress at:
- National level: Move first!
- EU level: Binding regulation!
- UN level: Cooperate with developing countries
Deliverables:
- Public country by country reporting for all sectors
- Public registries of Beneficial Owners
- Automatic information exchange – also with the poorest
countries
Thank you !