The Expansion and Internationalization of Mandatory Disclosure Rules

Abstract

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 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.

Keywords: Mandatory Disclosure Rules, MDR, DAC 6, CRS MDR, Reportable Transactions, Tax Avoidance, Tax Avoidance, Tax Evasion, Tax Avoidance Enablers, Intermediaries, Panama Papers, Paradise Papers, Pandora Papers

JEL Classification: K34