Will BEPS Action 12 (mandatory disclosure) be the next minimum standard?

By Irma Mosquera Valderrama

The BEPS Inclusive Framework provides for 4 minimum standards (Action 5, 6, 13 and 14) to be implemented by the 116 countries (as of 17 August 2018) that have committed to this Framework. However, the developments regarding BEPS Action 12 (mandatory disclosure) at EU level (DAC 6) and some non-EU countries in Latin America raise the question of whether this BEPS Action 12 will be the next minimum standard? and If so how what should be done to ensure that mandatory disclosure; (i) benefits tax administrations in developed and developing countries; (ii) provides certainty for taxpayers; and (iii) enhances trust, and honest behaviour of taxpayers and tax intermediaries.

As it was addressed by this author at the Dutch Association of Tax Advisors Annual Congress, there are arguments in favour (equal treatment, transparency, and prevent certain behaviour) and against (capacity tax administration, differences in implementation and privacy issues) the implementation of mandatory disclosure at EU level. See Blogpost 22 June 2018 and presentation Mandatory disclosure 21 june 2018.

Further arguments have been also addressed by Marina Serrat (trust in the tax administration) and Enza Sonetti (certainty). Both tax scholars provide a critical view of DAC 6.

This blogpost argues that more research should be carried out on the consequences of mandatory disclosure for taxpayers, tax administrations and intermediaries.  For instance, one question is how mandatory disclosure will affect the cooperative compliance programmes (see blogpost of José A. Rozas Co-operative Compliance and International Assurance Programs).

Another example could be the behavioural and cultural approach to tax compliance. This topic will be dealt with at the forthcoming European Consortium for Political Research (ECPR) conference in Hamburg, including a presentation on the link between honesty and cooperation (Does honesty facilitate cooperation? by Aron Szekely). 

This is an open invitation to political scientists, legal and tax scholars, sociologists and data science specialists to carry out interdisciplinary research on mandatory disclosure and its effects on taxpayers, tax administrations and tax intermediaries. If the BEPS Action 12 becomes the new minimum standard, we need to know what needs to be done so that this mandatory disclosure contributes to a better relationship between taxpayer, tax administration and tax intermediaries.