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A common reporting format
The objectives of public country-by-country reporting of tax information are to:
•provide confirmation that businesses are complying with their local corporate tax obligations in all of the jurisdictions in which they operate
•form part of a corporate communication strategy to better inform internal and external stakeholders of its tax policy and activities
•provide comparable information to stakeholders to better assess the impact of governments’ tax policies on both corporate and tax administration behaviour and performance
•increase the accountability of governments by:
- giving citizens another source of information about the tax that should go into national budget
- highlighting subsidies given to transnational businesses
•create a level playing field and enable benchmarking by industry sector
•assist national tax authorities, particularly when these are under-resourced
To fulfil these objectives, a country-by-country tax report must be:
•fit-for-purpose – providing the key information necessary to make an informed judgement
•simple and understandable for both internal and external stakeholders
•capable of being audited
•integrated in the existing international country-by-country reporting frameworks – Extractive Industries Transparency Initiative (EITI), the US Dodd-Frank Act Section 1504, the EU Directives on Accounting and Transparency, EU Capital Requirements Directive IV (CRD IV)
•capable of being implemented with no or low additional costs of compliance and administrative burdens for both businesses and tax administrations