What can be done about secrecy jurisdictions?

Increased financial transparency will make it harder to hide the illicit financial flows facilitated by secrecy jurisdictions. Introducing country by country reporting for all MNCs would provide crucial information to stakeholders such as citizens or tax authorities.

Under CBC, an MNC would publish every year in its accounts, for every country in which it operates:

• gross revenues, costs, profits, taxes paid, resources extracted, and remaining reserves.

With this information, people will be able to see “What tax is being paid where, whether that appears reasonable in relation to the tax rates in the country in question, and whether the group appears to be using tax havens for profits-shifting purposes.”

All this information is available in the companies’ internal accounts; therefore, country-by-country reporting would impose little additional cost to companies.

• In the US Senator Carl Levin has introduced the Stop Tax Haven Abuse Act, which includes a provision for introducing annual country-by-country reporting.
• In Europe, the EU Commission is expected to shortly release proposals on a form of country-by-country rules for the extractive sector.