The Tax Management Transfer Pricing Report ™ provides news and analysis on U.S. and international governments’ tax policies regarding intercompany transfer pricing.
Sept. 5—A cross-party group of U.K. politicians is trying to put public country-by-country reporting back on the agenda.
This time, their effort comes in the form of a proposed amendment—set for debate and vote before the House of Commons Sept. 5—that would entrench the principle of public reporting of tax strategy and data in law but give the U.K. Treasury the power to “switch on” the public reporting requirement at a time that suits the government.
In June the same group of politicians, led by opposition Labour MP Caroline Flint, sought to force public reporting of tax affairs by multinationals, but this was defeated by 22 votes, with the government citing business uncertainty following the U.K.’s vote to exit the European Union (25 Transfer Pricing Report 324, 7/14/16).
Little has changed since then by way of sentiment from business, still concerned that the U.K. formally committing to “public” reporting requirements for global companies would see them breaking ranks and going further than the OECD's requirement for tax information to be shared only among tax authorities.
Glyn Fullelove, group tax director of Informa Plc and chairman of the technical committee of the Chartered Institute of Taxation, said it's “very important” that country-by-country reports are available to tax authorities.
“However, some countries have made it clear that if country-by-country reports—made by U.S. multinationals and which are available to tax authorities—are likely to be made public, then they are not going to be keen to share the reports with other tax authorities. It undermines the ability of all tax authorities to see all reports,” Fullelove warned.
He said there is “no sense in one country going it alone” though it is clear that politicians want to keep the topic in the public eye.
Flint and her fellow members of parliament are now seeking to allay concerns about the timing for public reporting requirements, suggesting that the important goal this time is to get public country-by-country reporting into the statute books, giving the Treasury power to require the public element of the reporting, at a time that it considers suitable, in the future.
“Government has supported the idea of public country-by -country reporting,” Flint said in a statement. “Now they can enshrine that principle in law and give themselves an enabling power to act.”
Rebecca Reading, an international tax partner at RSM UK, said that the move risks derailing U.S. adoption of the OECD's anti-tax base erosion and profit shifting actions, especially if country-by-country reporting—the first measure to gain wide traction across the globe—were to be compromised because the U.K. pushed on ahead of other nations and required multinationals to make their reports public.
“The U.S. has said, ‘You can't have public country-by-country reporting,’ and that it will not ‘play’ on BEPS implementation if that is the case.
“That would be the first BEPS measure, with serious traction in terms of implementation, that could immediately fail because of a difference in philosophy, with the U.S. and OECD on one side and the U.K. and EU on the other,” Reading said.
The latest move follows the European Commission's order Aug. 30 for the Irish government to recoup 13 billion euros ($14.5 billion) in back taxes from Apple Inc. in a ruling in which it said that Ireland had granted “undue tax benefits” to the tech giant, in an arrangement it considered illegal under EU state aid rules (see related story).
Danish politician Margrethe Vestager—the Competition Commissioner at the heart of the investigation into Apple's tax affairs—said Sept. 1 that public country-by-country reporting would have flagged Apple's tax case (see related story).
To contact the reporter on this story: Penny Sukhraj in London at firstname.lastname@example.org
To contact the editor responsible for this story: Rita McWilliams at email@example.com
The proposed amendment is at http://src.bna.com/iie.
Copyright © 2016 Tax Management Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)