48 1 The need for tax transparency This chapter analyzes the scale and impact of corporate tax avoidance through profit shifting, outlines the limitations of existing policy measures, and presents evidence on how mandating increased corporate tax transparency can serve as an effective tool to curb such practices amongmultinational enterprises. [...] Corporate tax revenue losses are obtained by applying the statutory corporate tax rate of each country to the amount of profit estimated to be shifted out of that country. [...] For reference we indicate the start of the Base Erosion and Profit Shifting process in 2015 and the Tax Cuts and Jobs Act in 2018. [...] (2023) Atlas of the offshore world 1.2 The role for tax transparency One of the most important measures to combat profit shifting that was taken in the last yearswas endorsed inOctober 2021by close to140 countries and territories. [...] It consists of the principle of a globalminimum tax of 15%on the profits ofmultinational companies, known as Pillar Two of the OECD Two-Pillar solution to profit shifting.
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Table of Contents
- The need for tax transparency 5
- Trends in corporate tax evasion 5
- The role for tax transparency 6
- Corporate tax transparency: the current state 10
- Different reporting standard for multinationals 10
- Voluntary publication of CbCR: the public CbCR database 14
- How do publishing MNEs compare to other large MNEs? 26
- What can we learn from public CbCRs? 29
- The evolution of the tax transparency landscape 32
- An important shift: the EU public CbCR directive 32
- How will the transparency landscape change? 35
- Appendices 45
- List of jurisdictions reporting data to the OECD 45
- List of tax havens 47
- Public CbCR directive implementation 48
- Variables included in the EU Public CbCR directive 49
- Methodology for calculating transparency scores 50
- Website: Taxplorer 51
- HQ country and region for all CbCR publishing MNEs 52
