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BEPS Policy Failure—The Case of EU Country-By-Country Reporting

Author

Listed:
  • Murphy Richard

    (Professor of Practice in International Political Economy, City University, London, United Kingdom)

  • Janský Petr

    (Charles University, Prague, Czech Republic)

  • Shah Atul

    (City University of London, London, United Kingdom)

Abstract

The tax gap between taxes that are “actually” paid and taxes that “ought” to have been paid by multinational corporate entities has become an area of huge public policy concern in the recent decades. This study reviews the impact of new legislation to reveal the tax gap created by the EU banks and financial institutions passed in 2013 and in particular of the quality of the resulting country-by-country reporting (CBCR) requirement for banks. Although resulting tax gap estimates are noted, they suffer due to significant problems in the published data; much of it is due to the quality of the regulation requiring its publication and implementation. The findings reveal a lack of understanding of the technical and structural weaknesses of accounting in a transnational context in the design of this regulation. CBCR is destined to fail in achieving its regulatory objectives in this context unless necessary reform of the regulation is undertaken.

Suggested Citation

  • Murphy Richard & Janský Petr & Shah Atul, 2019. "BEPS Policy Failure—The Case of EU Country-By-Country Reporting," Nordic Tax Journal, Sciendo, vol. 2019(1), pages 63-86, January.
    • Handle: RePEc:vrs:notajo:v:2019:y:2019:i:1:p:63-86:n:5
    DOI: 10.1515/ntaxj-2019-0005
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    References listed on IDEAS

    as
    1. Petr Janský, 2020. "European banks and tax havens: evidence from country-by-country reporting," Applied Economics, Taylor & Francis Journals, vol. 52(54), pages 5967-5985, November.
    2. Paul Gillis & Richard Petty & Roy Suddaby, 2014. "The transnational regulation of accounting: insights, gaps and an agenda for future research," Accounting, Auditing & Accountability Journal, Emerald Group Publishing Limited, vol. 27(6), pages 894-902, July.
    3. Javier Garcia-Bernardo & Petr Janský & Thomas Tørsløv, 2021. "Multinational corporations and tax havens: evidence from country-by-country reporting," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 28(6), pages 1519-1561, December.
    4. Verena K. Dutt & Christopher A. Ludwig & Katharina Nicolay & Heiko Vay & Johannes Voget, 2019. "Increasing tax transparency: investor reactions to the country-by-country reporting requirement for EU financial institutions," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 26(6), pages 1259-1290, December.
    5. Vincent Bouvatier & Gunther Capelle-Blancard & Anne-Laure Delatte, 2017. "Banks Defy Gravity in Tax Havens," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) hal-03101505, HAL.
    6. Vincent Bouvatier & Gunther Capelle & Anne-Laure Delatte, 2017. "Banks in Tax Havens: First Evidence based on Country-by-Country Reporting," European Economy - Discussion Papers 055, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    7. Paul Gillis & Richard Petty & Roy Suddaby, 2014. "The transnational regulation of accounting: insights, gaps and an agenda for future research," Accounting, Auditing & Accountability Journal, Emerald Group Publishing, vol. 27(5), pages 894-902.
    8. repec:idq:ictduk:12851 is not listed on IDEAS
    9. Fatica, Serena & Gregori, Wildmer, 2018. "Profit shifting by EU banks: evidence from country-by-country reporting," JRC Working Papers in Economics and Finance 2018-04, Joint Research Centre, European Commission.
    10. Alex Cobham & Petr Janský & Markus Meinzer, . "A half-century of resistance to corporate disclosure," UNCTAD Transnational Corporations Journal, United Nations Conference on Trade and Development.
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    12. Cobham, Alex & Faccio, Tommaso & FitzGerald, Valpy, 2019. "Global inequalities in taxing rights: An early evaluation of the OECD tax reform proposals," SocArXiv j3p48, Center for Open Science.
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    Cited by:

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    2. Hackett, Franki & Janský, Petr, 2023. "Incremental improvement: Evaluating the emancipatory impact of public country-by-country reporting," CRITICAL PERSPECTIVES ON ACCOUNTING, Elsevier, vol. 96(C).

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