How to deliver fairer tax outcomes while minimizing conflict and supporting economic growth
The number of tax disputes between MNEs and tax authorities and between tax authorities themselves is growing. The expectation is that this upward trend is likely to accelerate in the near term. Yet, all parties have a common interest in minimizing the number and impact on these disputes. The Cooperative Compliance model is designed to minimize conflict between tax authorities and businesses by establishing a relationship based on transparency and justified trust. It does so by ensuring that the taxpayer and tax authority share a common understanding of the facts from the outset. When disputes do arise, the Cooperative Compliance model ensures that they are managed in the most efficient way possible.
The Cooperative Compliance project explores the legal, administrative and political constraints in getting more countries to adopt a relationship between tax administrations and MNEs, which is based on trust, openness and constructive dialogue. It examines why this is the case and how some countries have managed to overcome these constraints and what can be learned from their experience. Particular attention is being paid to non-OECD countries and how they could benefit from a Cooperative Compliance approach, including how to deal with BEPS-related issues.
The aim of this project is to produce a handbook (will be presented under the title “Cooperative Compliance: A Multi-stakeholder and Sustainable Approach to Taxation”) which governments and business could use to implement Cooperative Compliance programs. The research is supported by a number of pilot studies in Africa and Asia. This project brings together groups of researchers from all over the world and includes governments, MNEs and representatives from international organisations. It is carried out in cooperation with CATA and ICC (International Chamber of Commerce).