OECD: Tackling Aggressive Tax Planning through Improved Transparency and Disclosure

Aggressive tax planning is a major risk to the revenue base of many countries. As shown by some recent cases and settlements, numbers are vast. Countries have developed a number of strategies to deal with aggressive tax planning. The underpinning of any such strategy is to ensure the availability of timely, targeted and comprehensive information, which traditional audits alone can no longer deliver. The availability of such information is important to allow governments to identify risk areas in a timely manner and be able to quickly decide whether and how to respond, thus providing increased certainty to taxpayers. To be effective, tax administrations are moving closer to working in real time. Several countries have therefore introduced complementary disclosure initiatives aimed at improving their capability to identify and quickly respond to aggressive tax planning.

This report, approved by all OECD members, shows how countries are doing this – tackling aggressive tax planning through improved transparency and disclosure. It covers a range of approaches from mandatory disclosure rules to forms of co-operative compliance.

The report provides a toolkit for those concerned with aggressive tax planning and recommends a careful review of the different approaches to inform both tax policy and compliance. The report concludes that disclosure initiatives can help fill the gap between the creation/promotion of aggressive tax planning schemes and their identification by the authorities, therefore enabling governments to proceed immediately to an assessment of the issue and its resolution. Such early detection and resolution benefits both the taxpayer and governments, including in terms of fewer routine audits, increased transparency and a positive impact on compliance culture in general. For instance, based on its disclosure rules for tax avoidance transactions, the UK was able to cut off GBP 12 billion in avoidance opportunities.