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The Organisation for Economic Co-operation and Development (OECD) has published a discussion draft on mandatory disclosure rules in instances of tax avoidance.

In particular, the draft deals with Action 12 (Mandatory Disclosure Rules) of the Base Erosion and Profit Shifting (BEPS) Action Plan. Action 12 of the BEPS Action Plan recognises the benefits of tools designed to increase the information flow on tax risks to tax policy makers and tax administrations and identifies three key outputs:
The OECD draft addresses the first two of the outputs. The design of enhanced models of information sharing will need to take into account other elements of the Action Plan that also involve the sharing of information between tax authorities.

• recommendations for the modular design of mandatory disclosure rules to provide flexibility for country specific needs;
• a focus on international tax schemes and consideration of a wide definition of tax benefit to capture relevant transactions; and
• designing and putting in place enhanced models of information sharing for international tax schemes.

The draft provides an overview of the key features of a mandatory disclosure regime and considers the effectiveness based on available data from those countries with such regimes (Chapter II). It sets out a modular framework and options for the design of a mandatory disclosure regime (Chapter III) and considers how international transactions could best be captured by a mandatory disclosure regime (Chapter IV).

The Action Plan calls for the OECD’s project to be completed by September 2015. Comments on the draft should be submitted to the OECD by 30 April 2015.