05 July 2016
With the release of the final set of measures and recommendations on tackling aggressive corporate tax planning by the OECD in October 2015 as part of the first phase of the 15-point Action Plan on Base Erosion and Profit Shifting (BEPS) adopted by the G20 in 2013, it is now up to governments to implement the package of measures.
To help trade unions monitor the implementation of the package and the implications of corporate tax planning more broadly, the TUAC is releasing a full assessment of the 15 action points of the BEPS Action Plan as well as a background paper looking specifically at the new country-by-country reporting framework (BEPS measure n°13). In addition, the TUAC list of “tax jurisdiction at risk” has been updated.
For each of the 15 deliverables of the BEPS package, the TUAC assessment paper offers a brief description of each deliverable, including its nature (analytical report, non-binding recommendation, or binding minimum standard), the “pros and cons” and an evaluation of how relevant the deliverable is for trade union priorities.
The assessment looks as to whether the final deliverables met the initial expectations and ambition set out in 2013 by G20 governments. Compared to the status quo ante, the BEPS package brings significant improvements to the system of tax rules, and can rightly be considered a historic achievement from an international regulatory perspective. However, the standards for such praise are set rather low, given that international tax rules have been left essentially unchanged for almost a century. It remains to be seen whether and to what degree the final outcome will lead to effective outcomes towards preventing corporate tax avoidance.
The TUAC assessment identifies four shortcomings:
The TUAC assessment also highlights the BEPS deliverables that are particularly relevant to trade union action:
Trade union relevance does not end with transfer pricing and reporting issues. The TUAC Assessment identifies additional BEPS deliverables relevant to trade unions, including:
In addition to the assessment of the BEPS package, the TUAC is also releasing a specific paper arguing for public country-by-country reporting, and weighing the BEPS action 13 deliverable against existing country-by-country reporting requirements.
Finally, the “trade union package” offers an updated version of the TUAC list of tax jurisdictions at risk, drawn from three rating systems: the OECD-hosted Global Forum on Transparency and Exchange of Information for Tax Purposes, the Tax Justice Network (TJN) “Financial Secrecy Index” and the EU lists of tax havens.