March 28, 2012
Clark Gascoigne, +1 202 293 0740 ext. 222
Research and Advocacy Organization Recommends Country-by-Country Reporting to Help Curtail Tax Avoidance
WASHINGTON, DC – Global Financial Integrity (GFI) welcomed an initiative by the OECD’s first Global Forum on Transfer Pricing today to simplify and strengthen international transfer pricing standards, but noted the need to engage a wide variety of developing countries as the Global Forum moves forward with its work.
“Transfer pricing, the practice of pricing transactions between entities of the same multinational company, can often be abused by companies to shift their actual profits away from high-tax jurisdictions and recording them in low-tax jurisdictions, thereby minimizing their own tax bill,” said Heather Lowe, GFI’s legal counsel and director of government affairs. “Transfer pricing abuse starves countries—particularly developing countries—of the tax revenue needed to invest in infrastructure, healthcare, and education.”
“As the Global Forum moves ahead and conducts its planned transfer pricing risk assessment, simplifies the existing transfer pricing rules, and develops its detailed ‘how-to’ manual, it’s crucial that developing nations have a significant voice in the process,” added Lowe.
GFI also encouraged the Global Forum to recommend country-by-country reporting—requiring that all multinational corporations report sales, profits, and taxes paid in all jurisdictions in their audited annual reports and tax returns—so that it is easier for tax authorities and the OECD to see anomalies, such as millions of dollars of profit being recorded in “mailbox-only” subsidiaries located in tax havens.
Notes to Editors:
- Global Financial Integrity and its partners in the Task Force on Financial Integrity and Economic Development were recently nominated by Transfer Pricing Week as a “leading force on global transfer pricing development.”
- Click here for more information on the new initiative from the OECD Global Forum on Transfer Pricing.
- Click here for more information on country-by-country reporting.
+1 202 293 0740 ext.222
Global Financial Integrity (GFI) is a Washington, DC-based research and advocacy organization which promotes transparency in the international financial system as a means to economic development in the Global South.
For additional information please visit www.gfintegrity.org.