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The impact of increased tax transparency via public country-bycountry reporting on corporate tax aggressiveness: Evidence from the European Union

Published on 01 Dec 20 by "AUSTRALIAN TAX FORUM" JOURNAL ARTICLE

This paper exploits a unique setting to examine the impact of public country-bycountry reporting (CBCR) on the tax aggressiveness of multinational firms. The European Parliament introduced new rules in 2013 requiring the public disclosure, on a country-by-country basis, of certain tax-related information by European Union (EU) banks. Enhanced transparency via public CBCR is regarded as one way of increasing pressure on multinationals to better align the payment of corporate taxes with their true economic existence in each country they operate in. Based on a hand-collected sample of 79 multinational EU banks, no evidence is found of a reduction in tax avoidance in response to public CBCR and a similar result is found using a differences-in-differences research design with a control group of 46 multinational insurers.

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Dr Rodney Brown FTI
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