An Approach to BEPS Risk Assessment: Applying Data Analytics Techniques to Country-by-Country Reporting Data

This article discusses the application of data analytics techniques on data provided by multinationals in the country-by-country reporting to analyse, interpret and understand financial and other data with ease. Thus, it would provide a better understanding of multinationals’ global structures, economic activities and footprints to identify the material risk areas, thereby providing multinationals and tax authorities with a technique to undertake preliminary base erosion and profit shifting risk assessment. The authors have primarily relied on the tax risk indicators laid down in the OECD Handbook on Effective Tax Risk Assessment to build different stages of risk assessment. The possibility and the advantages of setting up a unified risk assessment tool based on the various risk assessment are also briefly discussed. The authors believe that such a tool, when publicly available, would enable different stakeholders to interpret the available data in country-by-country reporting more uniformly and requisite, timely action can be taken to address the identified risk areas.