Mandatory Disclosure Rules Research Articles

PENGUNGKAPAN PAJAK DI INDONESIA: SEBUAH CONTENT ANALYSIS

Many countries are starting to require tax disclosure. In Indonesia, the Mandatory Disclosure Rule (MDR) has been announced but has never been implemented. Tax disclosure is expected to be an alternative change to the Mandatory Disclosure Rule (MDR). The purpose of this study is to analyze tax disclosures made by companies in Indonesia. This research was conducted using the content analysis method to classify and measure each of Mgammal's (2019) measurement items more accurately. The results showed that 12 items were fully represented by all company samples, 13 items were presented as company samples and 6 measurement items were not presented at all by company samples. It is hoped that the implementation of tax disclosure measurements carried out in this research can become a basis for compiling relevant tax disclosure items in Indonesia.

The effect of expanded audit report on IPO underpricing: Evidence from China

This study investigates the impact of the expanded audit report on IPO underpricing. Using the sample of A-share listed firms in China from June 2014 to November 2021, we find that the expanded audit reports can reduce the speculative behavior of investors in the initial phase of IPOs, resulting in lower IPO underpricing and consecutive rising limits. The channel tests suggest that the disclosure of key audit matters reduces value uncertainty and alleviates investors' local bias. Our results are consistent to a series of robustness tests. Further analyses show that the negative relation between expanded audit reports and IPO underpricing intensifies when the legal environment is weak and firms' information transparency is low. Additional tests uncover positive market reaction after the mandatory disclosure rule in the long run. Overall, our study adds new insights to the information effects of the expanded audit reports in emerging markets.

Climate-Related Disclosure for Canadian Energy Companies - Getting Ready for the Mandatory Regime: Voluntary Guidelines, Rule Proposals, Governance Implications, and Best Practices to Avoid Greenwashing Allegations

Canadian energy companies are increasingly releasing corporate statistics, metrics, and strategy on climate-related matters to the public. These disclosures, offered both independently and in response to investor and stakeholder demand, detail strategic management of risks and opportunities related to a company’s present and future environmental impact. The Task Force on Climate Related Financial Disclosures (TFCD) and the International Sustainability Standards Board (ISSB) have helped to standardize voluntary disclosure frameworks and standards, influencing recent proposals for mandatory disclosure rules issued by securities regulators in Canada and the United States. This article presents a comprehensive review of this fast-shifting landscape, outlining governance implications and best practices to help organizations navigate these complex regulatory developments. In this context, it also presents noted trends and international perspectives to help Canadian companies manage legal exposure to civil and regulatory “greenwashing” allegations stemming from voluntary and mandatory public disclosures.

Enforcement and disclosure

Absent sufficient enforcement, disclosure regulations are often seen as inconsequential. However, enforcement could have unintended effects on firms' incentives to disclose information voluntarily. We develop a model to analyze the impact of enforcement on firms' mandatory and voluntary disclosure behavior. The model can accommodate different disclosure and enforcement regimes depending on its parameters, ranging from voluntary disclosure under stochastic information endowment to disclosure under an enforcement regime with punitive damages. In the generalized version, low-value firms disclose under a mandatory disclosure rule, medium-value firms do not disclose (some legally, some illegally), and high-value firms disclose voluntarily. Stronger enforcement does indeed increase the number of firms complying with the regulation. However, it also crowds out voluntary disclosure by making separation less attractive, resulting in a decrease in transparency overall. Nevertheless, stronger enforcement does still lead to positive capital market effects, such as lower mispricing. When we endogenize disclosure regulation, i.e., determine the rule according to firms' preferences, there exists a unique standard where no majority prefers a marginal change to the regulation, and that increases in enforcement.

KONSTRUKSI MODEL OECD BASE EROSION PROFIT SHIFTING ACTION PLAN 12TH GUNA MEWUJUDKAN TRANSPARANSI PERENCANAAN PAJAK

This study presents ideas about the construction of policies under the authority of the Directorate General of Taxes (DGT) in response to recommendations issued by the OECD regarding how to deal with aggressive tax planning related to the current era of globalization. The tax avoidance practice is known as the Base Erosion and Profit Shifting (BEPS) which is allegedly rampant by taxpayers (WP), especially for the Multi National Company (MNC). The impact of the BEPS practice is the loss of state revenues experienced by almost every country, especially developing countries. This is a major concern for developing countries because tax revenues are an important component of government revenues to encourage development. The OECD BEPS action plan issued at the G20 meeting in Moscow Russia in July 2013 had 15 action plans. In this case, the Indonesian Government has not implemented all the recommendations for the OECD BEPS action plan. One recommendation that has not been made is the OECD BEPS action plan 12 concerning Mandatory Disclosure Rules (MDR). MDR here is about the disclosure of the company's strategies regarding tax planning. This is necessary because there must be tax planning transparency carried out by WP. This condition is closely related to Human Activity Systems, which are purposeful activities. Therefore the writer studied it with an action-based Soft Systems Methodology (SSM) approach with the category of research interest.
 
 Keywords: BEPS, aggressive tax planning, mandatory disclosure rules, action-based SSM, research interest

Do tax-based proprietary costs discourage public listing?

This study investigates whether tax-based proprietary costs associated with being a public firm (i.e., costs resulting from increased visibility to the tax authority) discourage public listing. I exploit the introduction of a mandatory disclosure requirement (FIN 48) which generated a signal to the government regarding the uncertainty of public firms’ tax positions, allowing for more carefully targeted audits. I hypothesize and find evidence of an increased propensity to go private by public, tax aggressive firms following the enactment of the disclosure rule but prior to its adoption. Cross-sectionally, the effect is stronger among firms that are more sensitive to tax-based proprietary costs. Moreover, IPOs by tax aggressive firms exhibit a relative decline after FIN 48, consistent with the disclosure requirement deterring private, tax aggressive firms from going public. Overall, my findings suggest that mandatory disclosure rules imposing tax-based proprietary costs may discourage some firms from operating as public entities.

Real estate management activities owned by the State Treasury and an obligation to report MDR tax schemes

The prevailing view in the judicature and doctrine is that reporting of tax schemes (the so-called MDR - Mandatory Disclosure Rules) belongs to anti-abusive regulations. This institution, binding in Polish legislation since 1 January 2019, is a partial transposition of the EU Directive. However, its subjective and objective scope, as adopted by the national legislator, is much broader. It also applies to the management of real estate of the State Treasury, which gives rise to controversy as to whether this was the legislator's objective. The hypotheses formulated in the article assume, firstly, that the specifics of non-executive activities of statio fisci and staroste (mayors of cities with county rights) have not been taken into account in the new regulations and tax explanations, which poses certain practical problems. For instance, what is a tax scheme (reportable arrangement) in a private enterprise does not have to be a tax scheme in a statio fisci managing State Treasury property within dominium. Secondly, de lege lata regulations on reporting tax schemes, in relation to the State Treasury real estate, should be applied with great caution. Thirdly, de lege ferenda the legislator should specify the governing regulation. The research material used in the presented argumentation includes substantive law, doctrine and practice, which, however, is still to be shaped in the future.

Country Note: A Critical Approach on the Greek Implementation of the DAC6

The article provides a critical description of the main points of the Mandatory Disclosure Rules (MDR) in Greece following the implementation of the DAC6, specifically, what must be reported, who is responsible for it, the applicable penalties, and the deadlines for reporting. In parallel, certain issues of legal uncertainty arising from the ambiguous terms and concepts contained in the rules mentioned previously that need to be clarified are further analysed. In addition, the compatibility of the indicated Greek provisions mirroring, to a great extent, the content of the Directive with the fundamental freedoms and rights is examined. Greece, DAC6, Reportable Cross-Border Arrangements, Intermediaries, Penalties

THE EXPANSION AND INTERNATIONALIZATION OF MANDATORY DISCLOSURE RULES

The Panama Papers, the Paradise Papers, and most recently the Pandora Papers have exposed the role of tax advisors, lawyers, financial institutions, and other intermediaries in enabling cross-border tax avoidance and evasion. In response, mandatory disclosure rules (MDRs), which require that intermediaries report their clients’ tax schemes, are becoming prominent tools in the international fight against tax avoidance and evasion. This Article analyzes the development of MDRs over the past four decades as a global phenomenon with three distinct phases beginning in the 1980s. The analysis reveals several trends: expansion in the types of schemes that are reportable, extension of reporting obligations to a great diversity of intermediaries, and increasing multilateralism in the effort to curb intermediary-enabled tax avoidance and evasion. This Article shows how developments in international tax policy have affected, and will likely continue to affect, the expansion and internationalization of MDRs.

Steering Companies Towards Policy Objectives Through Mandatory Disclosure Rules in EU Law

Mandatory disclosure rules applicable to EU companies, such as the basic information every company is required to disclose on a public register and periodical financial information, have traditionally sought to mediate agency problems between managers and shareholders and company insiders and outsiders. However, mandatory disclosure foreseen in EU law has since expanded beyond that, especially in large companies, listed companies or those carrying out certain activities. Some those more recent mandatory disclosure rules – such as the Shareholders Rights Directive and the environmental and social disclosure rules foreseen in the Non-Financial Reporting Directive and the Sustainable Finance Disclosure Regulation – have gone beyond the traditional end of mediating agency problems (or, in the case of listed companies, provide price informativeness) and have, instead, been seeking to use their effects on corporate governance to steer companies towards distinct policy objectives set out by the legislator. By equipping the potential users of that information – shareholders and stakeholders alike – with more information, the legislator seeks to change the behaviour of the disclosing company without being too forceful or imposing.

Crisis-driven regulation: evidence from engineering China’s banking wealth management market

ABSTRACT This article uses the banking wealth management market to illustrate how the Chinese government intervened in the banking sector involved in crisis response reform packages. It argues that the regulatory processes regarding the banking wealth management market before and after 2015 support the crisis-driven regulation hypothesis. This article finds that the Chinese government’s initial response was to strengthen enforcement; it also made significant changes in legislation, including the redefinition of related products, classification of investors, and adding more mandatory disclosure rules. Finally, the Chinese government adjusted its financial supervisory architecture. It further compares the Chinese government’s regulatory strategies responding to the 2015 domestic systemic risk crisis with those adopted by its counterparts in developed countries following the 2008 global financial crisis. This article argues that the Chinese government purposefully adjusted regulatory strategies to regain control over state-owned banks and promote state-led financialisation.

Tax Compliance as an Element of the Corporate Compliance Management System

The aim of the paper was to identify areas of the compliance management system and assess the advisability of including tax compliance within the compliance management system. The methodology involved an analysis of relevant literature, legal acts and compliance standards. The empirical part presents the results obtained, having analysed areas of compliance management systems in a sample of ten entities listed on the WSE and included in the WIG20 index. The studied entities were found to present a variety of information on compliance management systems without taking into account the area of tax compliance. According to the author, the implementation of a coherent overall compliance management system would bring many benefits regarding the fulfillment of tax obligations – e.g. in the field of Mandatory Disclosure Rules (MDR) or transfer pricing – and also facilitate the conclusion of the so-called cooperation agreements in the area of taxes and the Advanced Pricing Agreements (APA).

So close and yet so far: The ability of mandatory disclosure rules to crack down on offshore tax evasion

So close and yet so far: The ability of mandatory disclosure rules to crack down on offshore tax evasion

Do reputation concerns motivate voluntary initiation of corporate social responsibility reporting? Evidence from China

We investigate whether reputation renders a firm more or less likely to report corporate social responsibility (CSR) activities by studying A-share firms listed on the Chinese stock market. After considering the mandatory disclosure rules required by the Shanghai Stock Exchange and the CSI 300 index, we find that a firm is more likely to initiate CSR reporting after it violates security regulations and is punished by supervisors, consistent with our reputation hypothesis. This effect is more prominent for non-state-owned enterprises (non-SOEs), demonstrating that the initiation of CSR reporting might be a remedy to a bad reputation for non-SOEs. By contrast, SOEs may focus more on political rather than economic factors.

APPLICATION OF MANDATORY DISCLOSURE RULES AND LEGAL CERTAINTY

This work analyzes mandatory disclosure rules (MDR) on tax planning under different perspectives, in order to find the most efficient solution when applying this kind of measure. One of the problems always raised in the application of mandatory disclosure rules is that the regime could increase the levelof uncertainty for taxpayers, when closing gaps and adjusting mismatches to avoid certain planning that are exploiting these deficiencies in the law. The topic analyzes legal certainty searching for a balance among principles, standards and rules, without denying the application of the principle.

Australia’s Inaction on Mandatory Disclosure Rules: Can You Have Too Many Disclosure Regimes?

Australia has not enacted Mandatory Disclosure Rules, either in the form recommended in the Final Report on Action 12 of the OECD/G20 Base Erosion and Profit Shifting project or the OECD’s Model Mandatory Disclosure Rules. This article explores some potential explanations for Australia’s inaction.

How Do You Do It? MDR in Different EU Member States

This article presents the results of a comparative survey completed by tax practitioners throughout the European Union regarding how they evaluate and work with the new mandatory disclosure rules under DAC6 (2018/822).

DAC6 from a Swiss Perspective

As a non-EU Member State, Switzerland does not have to transpose DAC6 into national law. As per international standards, however, Switzerland has implemented exchange of information in tax matters and country-by-country reporting. DAC6 has an impact in Switzerland for intermediaries with an EU nexus, as well as for taxpayers involved in EU tax matters. Whether Switzerland will introduce mandatory disclosure rules depends on international developments in this area.

Free ad(vice): internet influencers and disclosure regulation

AbstractConsumers rely on intermediaries (“influencers”) such as social media recommendations to provide information about products. The advice may be mixed with endorsement in a way that is unobservable to the follower, creating a trade‐off for influencers between the best advice and the most revenue. This article models the dynamic relationship between an influencer and a follower. The relationship evolves between periods of less and more revenue. The model can provide insight into policies such as the Federal Trade Commission's mandatory disclosure rules. An opt‐in policy may be superior: it deregulates influencers who are reaping the rewards of past good advice.

Mandatory Disclosure Rules and Taxpayers’ Rights: Where Do We Stand?

Curtailment of aggressive tax planning (ATP) has become a critical matter for international taxation. Mandatory disclosure rules (MDR) work as an early warning system for ATP strategies. They allow tax authorities to respond quickly to tax risks “through informed risk assessment, audits, or changes to legislation or regulations” while deterring taxpayers and tax advisers from designing, promoting or implementing ATP. MDR have become a significant trend, of which the EU Council Directive 2018/822 (DAC6) represents the most topical development. In light of the above, this study addresses the questions MDR raise regarding their “value rationality” and, therefore, its adequacy for protecting tax advisers’ and taxpayers’ rights. The article warns of the risk of MDR becoming a way of haunting legal tax planning, along with tax advisers and their business, and therefore a threat to the “hard core” of taxpayers’ rights to legal tax planning, legal aid and nemo tenetur, along with severe limitations to the economic freedoms of both taxpayers and tax advisers. The article also discusses the audi alteram partem issues arising from the taxpayers’ lack of involvement in the qualification as ATP of a given scheme, and the siege against the (legal) professional privilege that MDR represent. Finally, the article tackles the severe doubts raised by the sanctions for non-compliance with MDR, regarding legally protected rights, proportionality and culpability, as well as the use of non-monetary penalties and the communicability of evidence obtained through MDR in criminal proceedings.