Amid great change, it is sensible, however, to regularly pause and consider areas of risk and concern. While there are real benefits in increasing transparency between the taxpayer and the tax administration, and between tax authorities, calls to go further – in the direction of public disclosure of taxpayer data – require far greater consideration. As the German Finance Minister Wolfgang Schauble warned,“ sometimes there is a contradiction between transparency and efficiency”.
Technology overhaul: businesses need to be data-ready This desire for transparency of data comes at a time of technological revolution, meaning that the tax administrator and the tax director of tomorrow will also need to be a technologist. Given BEPS and AEOI, a mechanism is needed by which data are gathered and shared in a way that is consistent with the aspirations of BEPS but also does not impose a disproportionate burden on the taxpayer. There are, however, great opportunities here, and there is now a strong role for the G20 in helping countries to align with simple systems that deliver transparency with the minimum level of burden, repetition or cost. Businesses need to play an active role in helping to develop how the future will look, as the choices they make will impact the ease with which information can be provided.
While there are real benefits in increasing transparency between the taxpayer and the tax administration, and between tax authorities, calls to go further require far greater consideration.
Investing in technology will certainly make compiling and sharing information easier for companies and governments alike. But businesses in particular should ready themselves for this new environment. Not least, they would be prudent to introduce a data infrastructure that will accurately meet the information requirements, and consider the system and process changes that will need to be put in place. Data can be misinterpreted, so they will also need to plan for how they will present it clearly in the context of their businesses when responding to tax authorities. So, as the G20 reflects on how much is being achieved through BEPS, it needs also to look to the future and plan how it can help drive this forward coherently. Delivering this is no small task, and a challenge that may yet be greater than the ones met to date. What is for certain is that it requires all of us to hone our skills in these three key areas: taxation, communication and technology. ■
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