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UK first to commit to country by country reporting

printer Mail

The government announced that the UK ‘is the first country in the world [out of 44 countries] to formally commit to implementing the new country by country reporting template’, which was unveiled as part of the OECD’s first seven recommendations on base erosion and profit shifting (BEPS), which the OECD published last week and presented to the G20 finance ministers’ meeting.

UK-based multinationals will have to report to HMRC where they make profits and pay taxes around the world as Britain ‘takes the lead to clamp down on international tax avoidance’, financial secretary to the Treasury David Gauke MP said. The UK initiated the country by country reporting template during its G8 presidency last year, calling on the OECD to develop the template as part of its project to strengthen international standards on BEPS.

The template is designed to help tax authorities gather information on multinational companies’ global activities, profits and taxes, enabling them to better assess where risks lie and where their efforts to counter tax avoidance should be focused.

Gauke commented: ‘We believe that country by country reporting will improve transparency and help identify risks for tax avoidance – that’s why we’re formally committing to it. Reporting high level information using a standardised format across all jurisdictions will ensure consistency, give tax authorities the information they need and minimise the additional administration burden on business.’

Meanwhile, in a similar show of support from the UK government for tax transparency, chancellor George Osborne tweeted: ‘Thanks for the powerful petition to No. 11 on tax transparency by The UK is leading the way in the G20 – I promise to keep up the pressure.’