The divide between tax professionals and tax justice campaigners on the issues of transfer pricing and country by country reporting by multinationals was laid bare at a ground-breaking ‘tax and transparency forum’ attended by more than 200 people in London yesterday.
The speakers at the forum hosted by International Tax Review included Pascal Saint-Amans, Head of Tax Policy and Administration at the OECD; heads of tax at BP, Shell and Reed Elsevier; James Bullock of the law firm Pinsent Masons; and tax justice campaigners including Richard Murphy and representatives of ActionAid and Christian Aid.
The hosts were expecting a heated but constructive debate, and for most of the nine-hour conference delegates heard in turn the impassioned arguments of campaigners for country by country reporting and the deliberations of tax professionals whose main argument centred on the complexity of international tax.
Five panel discussions examined aspects of the transparency debate. They were informative but generated little or no heat, with one exception. During a discussion on tax dispute resolution Sol Picciotto, Emeritus Professor of Law at Lancaster University, interrupted James Bullock’s defence of modest meals shared at meetings with HMRC to say that the level of transparency being proposed was ‘quite clear – that taxpayers should declare what tax they pay in each country’.
Picciotto added: ‘As regards disputes, the terms of a settlement should be public. We’re not talking about sandwiches, we’re talking about the transparency of what tax people pay where. If a dispute goes to the tribunal, it’s public. If there’s a settlement, it should be public.’
Picciotto suggested that this would be along the lines of what happens in the US. But Judith Freedman, Professor of Tax Law at the University of Oxford, pointed out that such settlements are not made public in the US.
Freedman said: ‘They are subject to a procedure [that she had described to draw] a distinction between having all the information given to everybody and finding that many people just wouldn’t be able to use that information sensibly, and having well qualified people who know what they’re doing and are independent of the procedure, checking the settlement.’
The US system – a review of settlements over $2m – was a possible solution that would not breach taxpayer confidentiality, she added. ‘But you can have confidence that the thing is being done properly by having a proper process.’
Publishing details of settlements ‘would not be that helpful’ to people, Freedman said. ‘What are they going to make of them? I want to have a properly instituted organisation which has independent experts who can scrutinise those settlements. That’s far better than leaving it to whoever happens to be able to pick up on this, the press …’
‘That’s democracy,’ a delegate shouted from the audience. Freedman continued: ‘I believe it’s the job of properly constituted organisations, rather than the press, to examine this because that would give us integrity and confidence in the system. These are very, very difficult things to understand.’
Paul Morton, Head of Tax at Reed Elsevier – the parent company of LexisNexis, which publishes Tax Journal – said many of the numbers in the public domain in terms of tax avoided and tax paid in developing countries were ‘based on very broad brush estimates’.
They would benefit from more discussion with business and tax professionals, and complexities were best addressed by ongoing dialogue, he suggested.
The CBI said two weeks ago that it was bringing ‘an informed voice’ to the tax debate. For too long, business had been slow or reluctant to engage. This conference will be seen as a small step forward.
However, the liveliest contributions by far came from Murphy and other campaigners, and from Richard Brooks of Private Eye. Several delegates tweeted during the conference (see #taxtransforum) and Mark Lee, Head of the Tax Director Network, noted that complexity was not the only challenge facing participants: ‘It has to be admitted that few tax experts have oratory skills or passion comparable to [those of] tax campaigners and politicians.’
The divide between tax professionals and tax justice campaigners on the issues of transfer pricing and country by country reporting by multinationals was laid bare at a ground-breaking ‘tax and transparency forum’ attended by more than 200 people in London yesterday.
The speakers at the forum hosted by International Tax Review included Pascal Saint-Amans, Head of Tax Policy and Administration at the OECD; heads of tax at BP, Shell and Reed Elsevier; James Bullock of the law firm Pinsent Masons; and tax justice campaigners including Richard Murphy and representatives of ActionAid and Christian Aid.
The hosts were expecting a heated but constructive debate, and for most of the nine-hour conference delegates heard in turn the impassioned arguments of campaigners for country by country reporting and the deliberations of tax professionals whose main argument centred on the complexity of international tax.
Five panel discussions examined aspects of the transparency debate. They were informative but generated little or no heat, with one exception. During a discussion on tax dispute resolution Sol Picciotto, Emeritus Professor of Law at Lancaster University, interrupted James Bullock’s defence of modest meals shared at meetings with HMRC to say that the level of transparency being proposed was ‘quite clear – that taxpayers should declare what tax they pay in each country’.
Picciotto added: ‘As regards disputes, the terms of a settlement should be public. We’re not talking about sandwiches, we’re talking about the transparency of what tax people pay where. If a dispute goes to the tribunal, it’s public. If there’s a settlement, it should be public.’
Picciotto suggested that this would be along the lines of what happens in the US. But Judith Freedman, Professor of Tax Law at the University of Oxford, pointed out that such settlements are not made public in the US.
Freedman said: ‘They are subject to a procedure [that she had described to draw] a distinction between having all the information given to everybody and finding that many people just wouldn’t be able to use that information sensibly, and having well qualified people who know what they’re doing and are independent of the procedure, checking the settlement.’
The US system – a review of settlements over $2m – was a possible solution that would not breach taxpayer confidentiality, she added. ‘But you can have confidence that the thing is being done properly by having a proper process.’
Publishing details of settlements ‘would not be that helpful’ to people, Freedman said. ‘What are they going to make of them? I want to have a properly instituted organisation which has independent experts who can scrutinise those settlements. That’s far better than leaving it to whoever happens to be able to pick up on this, the press …’
‘That’s democracy,’ a delegate shouted from the audience. Freedman continued: ‘I believe it’s the job of properly constituted organisations, rather than the press, to examine this because that would give us integrity and confidence in the system. These are very, very difficult things to understand.’
Paul Morton, Head of Tax at Reed Elsevier – the parent company of LexisNexis, which publishes Tax Journal – said many of the numbers in the public domain in terms of tax avoided and tax paid in developing countries were ‘based on very broad brush estimates’.
They would benefit from more discussion with business and tax professionals, and complexities were best addressed by ongoing dialogue, he suggested.
The CBI said two weeks ago that it was bringing ‘an informed voice’ to the tax debate. For too long, business had been slow or reluctant to engage. This conference will be seen as a small step forward.
However, the liveliest contributions by far came from Murphy and other campaigners, and from Richard Brooks of Private Eye. Several delegates tweeted during the conference (see #taxtransforum) and Mark Lee, Head of the Tax Director Network, noted that complexity was not the only challenge facing participants: ‘It has to be admitted that few tax experts have oratory skills or passion comparable to [those of] tax campaigners and politicians.’
