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By Ben Stupples
The private tax reports that global businesses will send to governments this year will become public, according to Vodafone Group Plc’s group tax director.
“Our assumption is that this information will leak,” John Connors said in a panel discussion at the U.K. Chartered Institute of Taxation and International Fiscal Association’s Nov. 17 Cross Atlantic and European Tax Symposium in London.
“We are working on the basis that it will become public one way or another,” he added.
The comments from Connors, a former U.K. tax official, come as multinational companies prepare to file their first global tax reports by the end of this year. In the reports, companies will have to disclose their revenue, employee numbers, taxes paid, and tangible assets for each jurisdiction in which they operate.
Known as country-by-country reporting, the private reports are the most widely adopted policy from the OECD’s 15-action project to curb tax avoidance from multinationals. The measure aims to achieve that goal by providing a clearer picture of companies’ operations for each country in which they are active.
U.K.-based multinational companies will have to file their first country-by-country reports for 2016 within 12 months of the close of their fiscal year under the country’s Finance Act 2015. As a result, any company that operates under a calendar year for its accounts will have to file their report by Dec. 31, 2017.
Approximately 300 U.K. multinationals—all with group revenue of at least 750 million euros ($884.7 million)—will file the global reports, according to a government policy paper.
To prepare for its report becoming public, Connors said London-based telecommunications company Vodafone is considering publishing it in the future.
The publication timing will be “interesting as we would want to ensure it’s gone to the tax authorities first, and that they have had time to digest what’s in there,” he said during the panel discussion in response to a question from Bloomberg Tax.
At the same time, though, Vodafone is considering “whether we proactively publish information” on the report ahead of publishing it fully, he added. This approach would help to explain data that may look odd to the public if they read the report, such as “the difference between external and internal revenue.”
Over the past decade, Vodafone has built up a strong record of tax transparency, publishing five annual reports about its strategy and taxes paid worldwide.
In the same period, however, the company has been involved in disputes with both the U.K. and Indian tax authorities. In 2010, Vodafone agreed to pay 1.25 billion pounds ($1.65 billion) to settle a decade-long dispute in the U.K.
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