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Abstract

This article follows another published in July 2013 which proposed an international tax database as a means to counter tax evasion. The purpose of proposing an international database is to recommend a suitable strategy for global information sharing. Such a mechanism will enable revenue authorities to access a bank of relevant evidence to assist in compliance evaluation. An example of this is transfer pricing: by accessing stored information from audits internationally, revenue authorities may be able to determine whether transactions occurring between Multinational Enterprises (MNE) group members are arm’s length or otherwise. In a broader compliance sense it would allow access to taxpayer information linked to various forms of profit shifting. The difference between the proposed database and other forms of exchange of information is that taxpayer information is routinely uploaded into an international repository. It is kept stored and available to group members at the onset of their risk reviews or audits so auditors are better able to quantify risk prior to initiating compliance action

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