scholarly journals Country-by-country reporting: international experience of implementation

2021 ◽  
Vol 2021 (6) ◽  
pp. 29-39
Author(s):  
Iryna KRYSHTOPA ◽  
◽  
Larysa NIKOLENKO ◽  
Keyword(s):  
Income Distribution ◽  
Tax Evasion ◽  
Information Exchange ◽  
Multinational Enterprises ◽  
Transfer Pricing ◽  
International Experience ◽  
Country Report ◽  
Financial Flows ◽  
National Legislation ◽  
International Group

Considering the tasks set for Ukraine in frames of combating tax evasion of multinational enterprises, it is extremely important to bring the provisions of national legislation in line with international rules of tax administration. This primarily concerns the creation of institutional conditions in order to increase the financial flows transparency of multinational enterprises for tax administrations and enable them to obtain necessary information for identifying and assessing transfer pricing risks.Nowadays, more than 100 countries prepare a country-by-country report of an international group of companies, which discloses data on activities of certain enterprises in accordance with the requirements of national legislation and the unified standard of country-by-country reporting, approved by the OECD [1]. However, the analysis of domestic practice of reporting by countries of international group of companies, as well as the study of other regulations, which application allows metropolitan countries to ensure the transparent level of taxation of their multinational corporations, indicates the need for further improvement of domestic mechanisms for counteracting tax base erosion and exchange of information obtained in the framework of international exchange. This fact actualizes a chosen research topic. It is revealed that information disclosed in country-by-country reports gives the possibility for tax administrations to assess high risks of transfer pricing. In turn, the development of the mechanism for ensuring confidentiality and appropriate use of such reports will oblige taxpayers to careful adhere to transfer pricing rules and mandatory tax information exchange. The investigation of international experience in frames of implementation of uniform standards for the disclosure of information on income distribution and tax payments suggests the importance of country-by-country reporting. And identification of main trends in the field of international initiatives on issues of disclosure of income distribution information by groups of enterprises brings Ukraine closer to the consistent implemen­tation of this approach in practice of international groups of companies.

scholarly journals Illicit financial flows and foreign direct investment in developing countries

2016 ◽  
Vol 6 (4) ◽  
pp. 442-447
Author(s):  
Emmanuel Innocents Edoun ◽  
Alexandre Essome Dipita ◽  
Dikgang Motsepe
Keyword(s):  
Foreign Direct Investment ◽  
Interest Rates ◽  
Tax Evasion ◽  
Local Governments ◽  
Direct Investment ◽  
Good Governance ◽  
Transfer Pricing ◽  
Developed Countries ◽  
Financial Flows ◽  
Illicit Financial Flows

Africa is facing a number of challenges that are negatively affecting socio-economic development at all levels of governments and local governments are expected to play a leading role for Africa’s development. One of these challenges are illicit financial flows that are perceived by many as a crime against Africa’s transformation. The continent is losing billions of dollars every year because of tax evasion, corruption and inappropriate transfer pricing and maladministration. With tax being one of Africa’s main sources of revenue, current and past researches revealed that, illicit financial flows (IFFs) cripple African Governments tax base as a results of capital outflows and lack of good governance. This situation obviously is a challenge for Africa’s development as governments struggle to finance structuring projects and this in turn compels these governments to seek funds from international organisations at very high interest rates. It is also important to reveal that Foreign Direct Investment (FDI) rapidly grew after the Second World War with the intention to maximize profit on investment in less developed countries and specifically in the African continent. In competing in Africa, most multinationals main objective is to pay less tax, make extensive profits and transfer the proceeds to their country of origin. This subsequently gave rise to illicit financial flows in Africa where the continent is losing billions of dollars. Past studies equally revealed that, Africa’s revenue could increase between 55 and 65%, if appropriate mechanisms of monitoring the flows were in place. This study therefore is based on the premise that, tax evasion, illicit financial flows, corruption and abusive transfers pricing are all factors that affect Africa’s development. Using appropriate method of inquiry, this study wants to demonstrate the presence of FDI’s in Africa as a modus operandi behind tax evasion. It also using the “Appropriability Theory” to explain the rationale for FDI in Africa.

Demarcation Between the Concepts of Tax Evasion, Tax Planning and Aggressive Tax Planning in the Russian and Foreign Practice

Financial law ◽  
2021 ◽  
Vol 1 ◽  
pp. 32-36
Author(s):  
Natalya G. Andrianova ◽  
Keyword(s):  
Tax Evasion ◽  
Information Exchange ◽  
Multinational Enterprises ◽  
Legal Framework ◽  
Tax Planning ◽  
Tax Revenue ◽  
Public And Private ◽  
Private Interests ◽  
Border Trade ◽  
The Russian Federation

One of the main consequences of globalization is development of cross-border trade of goods, work and services, emergence of multinational enterprises operating on the territory of two or more jurisdictions. Taxation of multinational enterprises is always controversial taking into consideration seeking of balance of public and private interests which involves taxpayer’s desire to decrease the amount of payable taxes and reverse governmental interest in obtainment of the full amount of the tax revenue. The article covers and differentiates the main models of taxpayer’s behavior aimed at reducing the amount of payable taxes: tax evasion, tax planning and aggressive tax planning, the harm caused by these activities to governmental budget revenues. The article deals with Russian and foreign legal framework and practice of each of the abovementioned legal phenomenon, highlighted the necessity of statutory recognition in the Russian Federation of the term “tax planning” and its principles to define its limits clearly. The article outlines different approaches to the term “aggressive tax planning” and the limits of this term, importance of cooperation among jurisdictions and information exchange to detect and give appropriate legislative and administrative responses for aggressive tax planning schemes.

scholarly journals Implementation of step 13 of the BEPS Action Plan in the context of introducing automatic exchange of information for tax purposes

2021 ◽  
Vol 2021 (10) ◽  
pp. 41-47
Author(s):  
Yana OLIYNYK ◽  
Keyword(s):  
Multinational Enterprises ◽  
Transfer Pricing ◽  
Action Plan ◽  
International Exchange ◽  
Appropriate Use ◽  
International Group ◽  
Exchange Of Information ◽  
Multilateral Agreement ◽  
Tax Legislation ◽  
Model Action

The precondition for Ukraine's accession to the multilateral agreement on automatic exchange of interstate reports is the introduction of the Report by countries of the international group of companies (hereinafter - the intercountry report), which is part of the OECD-recommended three-tier transfer pricing documentation model (Action Plan 13, BEPS Action Plan 13). It has been proven that the implementation of the intercountry report is in the early stages of the implementation of Step 13(tax legislation establishes the obligation of multinational enterprises to submit such reports; the form and procedure for its preparation are designed , but there is no mechanism for ensuring confidentiality and appropriate use of information of such reports). The conclusion is made on the need to further improve the legislation of Ukraine in the field of international exchange of information for tax purposes and the relevance of research on these issues.

scholarly journals Formation of conditions for BEPS analysis in Ukraine

2021 ◽  
Vol 2021 (11) ◽  
pp. 88-102
Author(s):  
Olga IVANYTSKA ◽  
◽  
Tetiana KOSHCHUK
Keyword(s):  
Transfer Pricing ◽  
Action Plan ◽  
Financial Statements ◽  
Statistical Information ◽  
Government Agencies ◽  
Profit Shifting ◽  
Country Report ◽  
International Group

The article reveals the problems related to the formation of conditions for analyzing the transfer of profits between countries according to the OECD indicators of Action 11 of the OECD Recommendations on preventing the Base Erosion and Profit Shifting (BEPS Action Plan) in Ukraine. It is established that the calculation of OECD indicators with data on Ukraine may be complicated due to the lack of relevant statistical information, as well as due to the establishment of the process of processing, aggregation and analysis of information from companies (including new reporting – Notification of participation in an international group of companies and transfer pricing reporting according to the “three-tier model”, which includes Сountry-by-country report). It is determined: 1) what information needed to calculate OECD indicators for BEPS analysis is already available in statistical sources and financial statements of companies; 2) what data for these purposes can be obtained by government agencies from new reporting for international groups of companies and their members in Ukraine, which will be submitted by them from 2021 and later; 3) what economic figures will not be available for BEPS analysis according to OECD indicators after the start of these new reporting forms. The necessity of forming organizational bases for collecting and processing domestic data at macroeconomic and microeconomic levels is substantiated in order to include them in global calculations of OECD indicators and use them in determining the effectiveness of BEPS countering measures in Ukraine.

scholarly journals Low-Tax Jurisdictions in International Tax Planning

2021 ◽  
Vol 9 (3) ◽  
pp. 137-162
Author(s):  
Natalia Andrianova
Keyword(s):  
Tax Evasion ◽  
Multinational Enterprises ◽  
Tax Avoidance ◽  
Tax Planning ◽  
Global Trends ◽  
National Legislation ◽  
Global Trend ◽  
International Tax ◽  
Definition Of ◽  
Financial Transactions

Until recently low-tax jurisdictions have played an important role in the formulation of tax planning schemes by multinational enterprises. However with the onset of global trends towards deoffshorization, existing methods of tax optimization have seen significant changes. As there is currently no one single approach when creating the definition of, or defining a “low-tax jurisdiction”, in this article the definition and the main features of lowtax jurisdictions are proposed and the main stages in the formation and development of low-tax jurisdictions are detailed. On the basis of research carried out on the national legislation of low-tax jurisdictions, the main company types which meet the special legal formulae that can be incorporated into low-tax jurisdictions have been analyzed. In order to highlight similar characteristics and to simplify the analysis of the national legislation of low-tax jurisdictions so that general recommendations covering the nature of measures which can be used to counter illegal tax avoidance, tax evasion, money laundering and other illegal financial machinations, different classifications of low-tax jurisdictions have been analyzed. The unfair and perhaps even illegal use of low-tax jurisdictions often leads to violations of core tax principles which may have an impact on the overall size of budget revenues available to high-tax countries. Therefore, deoffshorization measures are being proposed at the international level. Currently the main global trend has been to increase the transparency of tax information and of financial transactions which are carried out by international exchanges. This is supported by the strengthening and expansion of cooperation between tax authorities which serves to counter the abuse of provisions in international tax treaties on the avoidance of double taxation.

Global Banks on Trial

2020 ◽  
Author(s):  
Pierre-Hugues Verdier
Keyword(s):  
Tax Evasion ◽  
Information Exchange ◽  
Sovereign Debt ◽  
Criminal Cases ◽  
Financial Infrastructure ◽  
Compliance Officers ◽  
The 2008 Financial Crisis ◽  
Financial Indices ◽  
Fundamental Shift ◽  
Global Banks

In the years since the 2008 financial crisis, U.S. prosecutors have brought dozens of criminal cases against the world’s most powerful banks, charging them with manipulating financial indices, helping their customers evade taxes, evading sanctions, and laundering money. To settle these cases, global banks like UBS, Barclays, HSBC, and BNP Paribas paid tens of billions of dollars in fines. They also agreed to extensive internal reforms, hiring hundreds of compliance officers, spending billions on new systems, and installing independent corporate monitors. In effect, they agreed to become worldwide enforcers of U.S. law and policies. This book examines the U.S. enforcement campaign against global banks across four areas: benchmark manipulation, tax evasion, sanctions violations, and sovereign debt. It shows that U.S. prosecutors have unilaterally carved out a new role as global bank regulators, heralding a fundamental shift in how international finance is overseen. Their ability to do so stems from U.S. control over vital hubs of the international financial system, from which they can threaten global banks with exclusion. In some areas, these unilateral U.S. actions have ushered in important multilateral reforms, such as the rise of automatic tax information exchange and better-regulated financial indices. In other areas, such as financial sanctions, unilateralism has attracted protests from other states and attempts to bypass U.S.-based financial infrastructure, which could undermine the country’s power.

Curbing Illicit Financial Flows

2018 ◽  
Author(s):  
Xiaodon Liang
Keyword(s):  
Tax Evasion ◽  
Developing Economies ◽  
International System ◽  
Tax Avoidance ◽  
Incentive Structure ◽  
Global Finance ◽  
Tax Havens ◽  
Financial Flows ◽  
Playing Field ◽  
Illicit Financial Flows

Illicit financial flows (IFFs) drain state finances and economic vitality, with disproportionate impact on developing economies. IFFs—including money laundering, tax evasion, and tax avoidance—pose a transnational problem addressed so far through international regimes of coordination and cooperation. But meaningful reductions in IFFs require addressing the root of the problem: information asymmetries. Developed nations and tax havens know where money is hidden and profits are made, while developing nations do not. Since the international system of global finance creates the incentive structure and permissive environment for illicit flows, it is at this level that states must focus their policy-making attention. New information-sharing mechanisms, such as automatic exchange of tax information and public country-by-country tax reporting, can level the playing field and enable lower-income states to effectively address the IFF problem.

Taxes, Transfer Pricing, and The Multinational Enterprise

2009 ◽  
Author(s):  
Lorraine Eden
Keyword(s):  
United States ◽  
Multinational Enterprises ◽  
Transfer Pricing ◽  
Multinational Enterprise ◽  
The United States ◽  
International Taxation ◽  
Complex Issue ◽  
Daunting Task ◽  
National Governments

For more than ten years now, transfer pricing has been the top international taxation issue faced by multinational enterprises (MNEs). This article aims to outline, for the reader, the complex issue of transfer pricing, as seen by MNE managers and by governments faced with the daunting task of taxing business profits. The article is organized as follows. First, it briefly discusses transfer pricing from the MNE's perspective and the problems that this raises for national governments. It then reviews the basic rules of international taxation as they apply to MNE profits. The specific rules and procedures that apply to transfer pricing, as practiced in the United States and recommended by the OECD, are then outlined. It concludes with a discussion of unresolved problems that are likely to plague transfer pricing over the next few years.

scholarly journals Corporate Income Shifting in an Era of Tax Multilateralism: The Impact of Exchange-of-Information Agreements

2021 ◽  
Vol 69 (2) ◽  
pp. 357-389
Author(s):  
Devan Mescall ◽  
Paul Nielsen
Keyword(s):  
Multinational Corporations ◽  
Multinational Enterprises ◽  
Transfer Pricing ◽  
Empirical Studies ◽  
Annual Reports ◽  
Income Shifting ◽  
Exchange Of Information ◽  
Pricing Rules ◽  
Using Data ◽  
The Impact

Using data from the annual reports of over 100,000 subsidiaries of multinational enterprises (MNEs) from 55 countries between 2003 and 2012, the authors of this article investigate the impact of exchange-of-information agreements ("EOI agreements") on tax-motivated income shifting. Transparency created by the signing of EOI agreements is expected to reduce the tax-motivated shifting of income by multinational corporations. Whether such agreements affect the income-shifting behaviour of multinational corporations is an unanswered question. The authors find evidence that, on average, EOI agreements do have an impact on tax-motivated income shifting. Additionally, they find that more advanced, modern EOI agreements are associated with a larger decrease in tax-motivated income shifting compared to the impact of early EOI agreements. This evidence challenges the prevalent assumption in empirical studies that EOI agreements are homogeneous. Supplemental analyses suggest that factors that affect the information asymmetry between MNEs and tax authorities, such as corporations with high levels of intangibles and tax authorities with strong transfer-pricing rules and enforcement, can diminish or enhance the effectiveness of EOI agreements in moderating tax-motivated income shifting. The evidence provided by this study shows that consideration of the tax authorities' information environment and the substance of an EOI agreement is essential when assessing the impact of such an agreement on the tax behaviour of sophisticated taxpayers such as multinational corporations.

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