Its Good Money Week this week a campaign to raise awareness of ethical issues in finance and no doubt tax issues will feature on the agenda, with lobby groups taking the opportunity to get issues of fairness and the taxation of multinationals back in the headlines.
The UK government was early in expressing support for the OECDs proposals for Country-By-Country (CBC) reporting last month, talking about improving transparency in terms of what tax is paid where.
“Tax justice campaigners” latch on to the issue of transparency, believing that if multinationals are made to disclose what they do, they will change their behaviour.
Is this a reasonable belief
For anyone who wants to know how the major multinationals have planned their tax affairs, there is already information in the public domain including articles in the tax press which tell us “how they did it”, plus the general principles of how groups can be structured are well known by the profession.
Also, looking at the OECD CBC proposals, the purpose of CBC is for tax authorities to risk-assess the international tax position by increasing transparency between the business and the tax authority.
This isnt the same as putting significant additional information into the public domain. Indeed the US appears to be taking the line that the CBC report should be confidential to their tax authority, and only made available to other jurisdictions under international treaty Exchange of Information rules.
The UK may go the same way. HMRC is known to be bordering on paranoid as far as confidentiality is concerned.
Despite the lobby groups having achieved awareness, there appear to be very few in the tax profession standing behind their message.
One reason is frustration. Although some points are well made, conclusions are drawn based on an incomplete analysis, or on a misunderstanding like on CBC reporting; if it is transparency that the campaigners want, they may be the ones that end up frustrated.
Rebecca Reading is a tax partner at Baker Tilly.