The OECD’s new terms of reference to assess the implementation by countries of BEPS Action 13 related to Country-by-Country Reports (CbCR) may penalise countries, especially developing ones, that try to obtain by their own means the CbCR’s valuable data needed to tackle multinational tax avoidance.
Country-by-Country Reports (CbCR) (to be prepared by multinationals with group revenues over EUR 750 million) will offer information on multinational economic activity, profits and tax paid broken down for each country where they operate. This CbCR “map” will reveal any misalignments between the location of real activity, and where profits are ultimately declared to hold both multinationals and tax havens to account.
The introduction of a key policy tool against multinational companies’ tax avoidance has been handled so badly that developing countries are now exposed to worse inequalities. In a new report published today, we call for immediate changes to limit the damage done.
Education is a fundamental human right and a global public good. So how do we address the lack of financing for it around the world? TJN has written a study on the role of global tax in financing the Sustainable Development Goals (SDGs) for the United Nations Education Commission (in full, the International Commission on Financing Global Education Opportunity). That study, developed with the support of ActionAid and Oxfam, and written with Prof. Steven Klees, is published by the Commission today.
After 13 years, our founding executive director John Christensen is stepping down. We’re delighted that John will stay on and become our new board chair. And I (Alex Cobham) am honoured to accept the role of chief executive at TJN.
Since I took up the post of Director of Research at the start of last year, I’ve had the chance to look back and think about the achievements so far of John and the network. In changing the political weather on these issues, those achievements are nothing short of extraordinary.
Behind the success of this radical agenda has been the use of high quality research and excellent communications to take clear, innovative solutions into the policy mainstream. The piece below sets out some of the dramatic changes that have taken place, some of the ways that John and TJN have achieved this, and a hint of the work that’s to come. (John would never be so immodest, incidentally – but please forgive me, because the achievements are far from modest.)
TJN has, since its establishment in 2003, led the way in developing and promoting the idea of public country-by-country reporting (CBCR) for multinational companies. Open Knowledge International, who partnered with TJN in establishing Open Data for Tax Justice (#OD4TJ), are pioneers in using open data to achieve tangible policy results and human progress. The Financial Transparency Coalition (FTC) has championed public CBCR since its inception, as have many of our fellow FTC members including Christian Aid and Tax Justice Network-Africa.
There are now multiple requirements for CBCR from multinational companies, depending on the jurisdiction and industry sector, some fully public, and an OECD standard has been introduced which will require all multinationals of a certain scale to report privately to the tax authority in their headquarters country. It is critical that this data is used effectively, and seen to be so used. The next 2-3 years provide a window in which to confirm the value of CBCR; to move policymakers towards a global consensus on requiring public CBCR; and to establish a single format for reporting, to ensure lower compliance costs for business and more effective use of the data by civil society, media and tax authorities alike.
As leading organisations in this field, we now propose to establish an open database, to include all publicly available CBCR data; to provide a venue for multinationals that wish to lead in transparency by publishing their data voluntarily; and to make the data, and core tools and risk measures, accessible to a wider audience.
It’s important that we have a wide range of views and voices feeding in to the process, to ensure the design meets the key user needs. To that end we are working on a range of channels. First among these is an international survey that we would urge as many people and organisations from around the world as possible to fill in.
Next week we will convene an international expert group meeting, to be followed in the coming months by data sprint/s and additional collaborative work to bring together open data, accounting and tax justice experts with the aim of delivering clear progress in four key areas:
- First, a common format nesting all of the existing CBCR standards will be created.
- This will be used to construct, second, an open, online database into which researchers can enter new CBCR data as it becomes available, and which has the potential to become the main repository for public CBCR data, and the main source for future research and policy analysis.
- Third, we will create a number of tools and indicators of the misalignment of declared, taxable profit with the location of real economic activity; and the ability quickly to rank and compare across companies and across jurisdictions in order to identify priorities for further scrutiny.
- Finally, the aim is to ensure the database is fully linked in with related projects including, crucially, to establish relationships with the increasing volume of beneficial ownership data available, including through potential partners such as OpenCorporates and Open Contracting.
The intention is to obtain over time significant backing from a range of users including investor groups, reporting companies, civil society groups, tax authorities and policymakers. Please get in touch if you would like to be involved in any way, via Open Data for Tax Justice – and please do fill in the survey!