International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Sunday, February 4, 2018

BEPS Action 13: Jurisdictions implement final regulations for first filings of CbC Reports, with over 1400 bilateral relationships now in place for the automatic exchange of CbC information

a further important step was taken to implement Country-by-Country (CbC) Reporting in accordance with the BEPS Action 13 minimum standard, through activations of automatic exchange relationships under the Multilateral Competent Authority Agreement on the Exchange of CbC Reports ("the CbC MCAA").

The automatic exchange of Country-by-Country Reports which is set to start in June 2018 will give tax administrations around the world access to key information on the annual income and profits, as well as the capital, employees and activities of Multinational Enterprise Groups that are active within their jurisdictions. With more than six months before the first exchange deadline, there are now over 1400 automatic exchange relationships in place among jurisdictions committed to exchanging CbC Reports as of mid-2018, including those under EU Council Directive 2016/881/EU and bilateral competent authority agreements (including 31 with the United States).

The full list of automatic exchange relationships that are now in place is available on the OECD website, together with an update on the implementation of the domestic legal framework for CbC Reporting in jurisdictions; on jurisdictions that do not require CbC reporting for 2016 but will permit voluntary parent surrogate filing; and on steps that have been taken by jurisdictions to address a transitional issue for the first year of CbC reporting.

This additional wave of activations of CbC Reporting exchange relationships is another important step towards the timely implementation of Country-by-Country Reporting and reflects the commitment of BEPS Inclusive Framework members from all corners of the world to the fight against base erosion and profit shifting.

February 4, 2018 in BEPS, OECD | Permalink | Comments (0)

Saturday, February 3, 2018

Further progress made in implementation of BEPS measures against tax treaty abuse

On 15 December 2017, Jersey deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting ("multilateral convention") with the OECD. Subsequently, on 20 December 2017, Curaçao has joined the multilateral convention, following a communication from the Kingdom of the Netherlands to the OECD.[1] A provisional list of reservations and notifications for Curaçao has been provided and a definitive version will be deposited with the OECD at the time of the deposit of the instrument of ratification of the Kingdom of the Netherlands.

This underlines the strong commitment of Jersey and Curaçao to international tax standards to prevent the abuse of tax treaties and base erosion and profit shifting (BEPS) by multinational enterprises.

The multilateral convention offers concrete solutions for governments to close the gaps in existing international tax rules by transposing results from the OECD/G20 BEPS Project into bilateral tax treaties worldwide. The multilateral convention modifies the application of thousands of bilateral tax treaties concluded to eliminate double taxation. Tax treaty-related measures that may be implemented through the multilateral convention include those on hybrid mismatch arrangementstreaty abusepermanent establishment, and mutual agreement procedures, including agreed minimum standards to counter treaty abuse and to improve dispute resolution and an optional provision on mandatory binding arbitration.

"As the third jurisdiction after Austria and the Isle of Man to ratify the multilateral convention following the signing ceremony in June 2017, Jersey is a forerunner in the implementation of the far-reaching reforms agreed under the BEPS Project” said Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration. “I also welcome Curaçao as the 72nd jurisdiction covered by the convention and look forward to other jurisdictions following suit so that the benefits of the convention can take effect and improve the international tax system for the benefit of all our citizens".

Now covering 72 jurisdictions and over 1,100 treaties, the Convention is expected to be signed by additional governments in the near future. 

The multilateral convention was adopted by an ad hoc Group of over 100 jurisdictions working on an equal footing on 24 November 2016 and already covers 72 jurisdictions. The Republic of Austria became the first jurisdiction to deposit its instrument of ratification for the multilateral convention on 22 September 2017, the Isle of Man, the second, on 19 October 2017, and Jersey the third on 15 December 2017. The multilateral convention will enter into force three calendar months after the date of deposit of the fifth instrument of ratification, acceptance or approval.

The OECD is the depositary of the multilateral convention and is supporting governments in the process of signature, ratification and implementation. The position of each party and signatory under the multilateral convention is available on the OECD website.

February 3, 2018 in BEPS, OECD | Permalink | Comments (0)

Friday, February 2, 2018

Panama joins international tax co-operation efforts to end bank secrecy

 The Director-General of Revenue and the delegated Competent Authority of Panama, Publio Ricardo Cortés, has signed the CRS Multilateral Competent Authority Agreement‎ (CRS MCAA), in presence of OECD Deputy Secretary-General Masamichi Kono. Panama is the 98th jurisdiction to join the CRS MCAA, which is the prime international agreement for implementing the automatic exchange of financial account information under the Multilateral Convention on Mutual Administrative Assistance.

By signing the CRS MCAA today, Panama is re-affirming its commitment to the automatic exchange of financial account information pursuant to the OECD/G20 Common Reporting Standard (CRS), with exchanges set to commence in September 2018. The signing of the CRS MCAA will allow Panama to activate bilateral exchange relationships with the other 97 jurisdictions that have so far joined the CRS MCAA.

Members of the Global Forum on Transparency and Exchange of Information for Tax Purposes are working together to monitor and review the implementation of the international standard for the automatic exchange of tax information.

At the signing ceremony, Deputy Secretary-General Masamichi Kono said: "I congratulate Panama on taking this very substantial step towards putting in place a truly global exchange network for the automatic exchange of financial account information. Your signing today puts Panama is an excellent position to fully deliver on its commitment to start CRS exchanges with all interested appropriate partners in September of this year."

The 98 jurisdictions that are signatories to the CRS MCAA can be found at: www.oecd.org/ctp/exchange-of-tax-information/MCAA-Signatories.pdf

February 2, 2018 in OECD | Permalink | Comments (0)

Thursday, February 1, 2018

Eight FTA members kick off multilateral tax risk assurance programme to provide early certainty for tax administrations and MNEs

A pilot of a new FTA programme for the multilateral risk assessment of large MNE groups was launched at an event today in Washington DC. The International Compliance Assurance Programme (ICAP) is a pilot for a voluntary programme that will use CbC Reports and other information to facilitate open and co-operative multilateral engagements between MNE groups and tax administrations, with a view to providing early tax certainty and assurance.

By co-ordinating conversations between an MNE group and tax administrations in several jurisdictions, the programme should also ensure a more effective use of transfer pricing information (including that contained in a group's CbC report, master file and local file), a more efficient use of resources both for the MNE group and for tax administrations and, in the longer term, fewer cases entering into mutual agreement proceedings (MAP). ICAP has been developed under the framework of the OECD Forum on Tax Administration (FTA) Large Business and International Programme, sponsored by the Canada Revenue Agency (CRA).

A pilot for ICAP, which includes eight FTA member tax administrations (Australia, Canada, Italy, Japan, the Netherlands, Spain, the United Kingdom and the United States) was launched at an participant orientation event, introduced by Mr. David Kautter, acting Commissioner of the IRS, and Mr. Bob Hamilton, Commissioner of the CRA. A multilateral assessment of specific international tax risks posed by each MNE group in the pilot will commence during the first half of 2018 and is expected to be completed within a target timeframe of 12 months. A handbook which provides more detail on ICAP and the procedure for the pilot was also launched at the event.

February 1, 2018 in OECD | Permalink | Comments (0)

Monday, January 29, 2018

Major step forward in international tax co-operation as additional countries sign landmark agreement to strengthen tax treaties

Ministers and high-level officials from Barbados, Côte d’Ivoire, Jamaica, Malaysia, Panama and Tunisia have today signed the BEPS Multilateral Convention bringing the total number of signatories to 78. This Convention updates the existing network of bilateral tax treaties and reduces opportunities for tax avoidance by multinational enterprises. 

In addition to those signing today, Algeria, Kazakhstan, Oman and Swaziland have expressed their intent to sign the Convention, and a number of other jurisdictions are actively working towards signature by June 2018. So far, four jurisdictions – Austria, the Isle of Man, Jersey and Poland – have ratified the Convention, which will enter into force three months after a fifth jurisdiction deposits its instrument of ratification. The Convention is the first multilateral treaty of its kind, allowing jurisdictions to integrate results from the OECD/G20 BEPS Project into their existing networks of bilateral tax treaties.

“Today’s signing of the multilateral convention is another major step towards updating the international tax rules through the swift implementation of the BEPS package,” said OECD Secretary-General Angel Gurría.

“Beyond saving signatories from the burden of re-negotiating thousands of tax treaties bilaterally, the convention results in more certainty and predictability for businesses, and a better functioning international tax system for the benefit of our citizens.”

The OECD/G20 BEPS Project delivers solutions for governments to close the gaps in existing international rules that allow corporate profits to « disappear » or be artificially shifted to low or no tax environments, where companies have little or no economic activity. Revenue losses from BEPS are conservatively estimated at up to USD 240 billion annually, or the equivalent of up to 10% of global corporate income tax revenues. Almost 100 countries and jurisdictions are currently working in the Inclusive Framework on BEPS to implement BEPS measures in their domestic legislation and bilateral tax treaties. The sheer number of bilateral treaties makes updates to the treaty network on a bilateral basis burdensome and time-consuming.

The Convention, developed through inclusive negotiations involving more than 100 countries and jurisdictions under a mandate delivered by G20 Finance Ministers and Central Bank Governors, solves this problem. It will modify existing bilateral tax treaties to swiftly implement the tax treaty measures developed in the course of the OECD/G20 BEPS Project. Treaty measures that are included in the Convention include those on hybrid mismatch arrangementstreaty abuse and permanent establishment, and dispute resolution, including an optional provision on mandatory binding arbitration, which has been taken up by 28 jurisdictions.


The OECD is the depositary of the Convention and is supporting governments in the process of signature, ratification and implementation.

The text of the Convention, the explanatory statement, background information, database, and position of each signatory are available at http://oe.cd/mli.

January 29, 2018 in OECD | Permalink | Comments (0)

150 Pages of comments on new tax rules requiring disclosure of CRS avoidance arrangements and offshore structures

On 11 December 2017, interested parties were invited to provide comments on a discussion draft on model mandatory disclosure rules. The model rules are intended to target promoters and service providers with a material involvement in the design, marketing or implementation of CRS avoidance arrangements or offshore structures. The proposed rules would require such intermediaries to disclose information on the scheme to their national tax authority. The rules contemplate that information on those schemes (including the identity of any user or beneficial owner) would then be made available to other tax authorities in accordance with the requirements of the applicable information exchange agreement.

Download Public-comments-mandatory-disclosure-rules-for-CRS-avoidance-arrangements-offshore-structures

January 29, 2018 in OECD | Permalink | Comments (0)

Monday, November 20, 2017

The Global Forum on Tax Transparency intensifies the pressure on tax evaders worldwide

In the aftermath of the  release of the “Paradise Papers”, 200 delegates from more than 90 delegations met in Yaoundé, Cameroon for the 10th meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes which now includes 147 countries and jurisdictions.
 
The Global Forum adopted the first report on the status of implementation of the AEOI Standarda few weeks after almost 50 countries started exchanges of information under the new standard on automatic exchange of information, with another 53 countries starting in September 2018. The principle of annual implementation reports and peer reviews were agreed at the meeting to ensure effective implementation and a level playing field.
 
The Global Forum published peer reviews of Curaçao, Denmark, India, Isle of Man, Italy and Jersey. The publications bring to a total of 16 the number of second round reviews of the Forum’s 147 member countries and jurisdictions based on its international standard of transparency and exchange of financial account information on request. The standard was reinforced last year to tackle tax evasion more effectively, particularly in areas covering the concept of beneficial ownership.
 

November 20, 2017 in GATCA, OECD | Permalink | Comments (0)

Monday, October 30, 2017

Peru becomes 114th Country to Sign OECD's Multilateral Convention on Mutual Administrative Assistance in Tax Matters

Claudia María Amelia Teresa Cooper Fort, Minister of Economy and Finance of Peru, signed the Multilateral Convention on Mutual Administrative Assistance in Tax Matters in the presence of the Deputy Director of the OECD's Centre for Tax Policy and Administration, Grace Perez-Navarro. The Republic of Peru is the 114th jurisdiction to join the Convention, and the 12th Latin American jurisdiction to do so.

The Convention is an instrument for international tax co-operation that was developed jointly by the OECD and the Council of Europe in 1988 and amended in 2010 to respond to the call by the G20 to align it to the international standard on exchange of information.

The Convention provides all forms of administrative assistance in tax matters: exchange of information on request, spontaneous exchange, automatic exchange (including pursuant to the OECD/G20 Standard for Automatic Exchange of Financial Account Information in Tax Matters), tax examinations abroad, simultaneous tax examinations and assistance in tax collection. It guarantees extensive safeguards for the protection of taxpayers' rights.

As such, it guarantees extensive safeguards for the protection of taxpayers' rights and provides a legal basis for other forms of cross-border tax cooperation, including assistance in the collection of taxes, or the undertaking of joint tax examinations with partner administrations.

By signing the Convention today, Peru strongly reaffirms its commitment to fight international offshore tax avoidance and evasion. The Convention will allow Peru to rapidly expand its network of information exchange partners and to swiftly implement the transparency measures of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project , in particular the automatic exchange of Country-by-Country reports under Action 13, which we intend to start as from next year.

Peru expands its capacity to fight international offshore tax avoidance and evasion

L-R: Claudia María Amelia Teresa Cooper Fort (Minister of Economy and Finance, Peru), Mercedes Araoz (Prime Minister, Peru), Grace Perez-Navarro (Deputy Director, OECD Centre for Tax Policy and Administration)

The 114 jurisdictions participating in the Convention can be found at: www.oecd.org/ctp/exchange-of-tax-information/Status_of_convention.pdf

October 30, 2017 in GATCA, OECD | Permalink | Comments (0)

Thursday, October 19, 2017

OECD Hiring Senior Adviser - Harmful Tax / Tax Crime - International Co-operation and Tax Administration Division (CTPA/ICA)(Job Number: 11720)

The OECD has earned a leading role in international tax issues. The Centre for Tax Policy and Administration (CTPA) is the focal point for the OECD’s work on all taxation issues, both international and domestic, and it works to advance the Strategic Orientations of the Secretary General, ensuring impact of the OECD tax work in the international governance architecture, in co-ordination with the OECD Sherpa team. The CTPA collaborates with other parts of the Organisation on issues such as tax and climate change, tax and growth, and the impact of taxation on labour markets and several other multidisciplinary projects The CTPA also provides the analytical support to the OECD’s Committee on Fiscal Affairs (CFA), which consists of senior tax policy and administration officials from OECD countries, Associate and Partner countries and other international and regional tax organisations. Through its work, the CTPA enhances the OECD’s global role in standard-setting, building knowledge, communicating with the world and interacting with governments from around the world to inform and influence policy making in the tax area.

The CTPA is looking for a Senior Adviser to lead, manage and supervise the work of the Forum on Harmful Tax Practices (FHTP) and the Task Force on Tax Crimes and other crimes (TFTC). The sucessful candidate will report to the Head of the International Co-operation and Tax Administration Division (CTPA/ICA).

The vacancy is open to nationals of countries and jurisdictions participating in the Inclusive Framework on BEPS (see link for full list of members)

 
Main Responsibilities
 
Management
  • Manage and motivate the team working on the Forum on Harmful Tax practices (FHTP) and the Task Force on Tax Crimes and Other Crimes (TFTC) to deliver high quality results and contribute to their professional development.

Analysis, project management and drafting

  • Lead and supervise the work of the FHTP.
  • Provide technical input for FHTP members to meet FHTP minimum standards.
  • Supervise and review the drafting of notes and reports as necessary for circulation and approval by the FHTP and the TFTC.
  • Monitor developments in relation to the work on harmful tax practices.
  • Lead and supervise the work of the TFTC.
  • Support the work of the Academy for Tax Crime Investigation and other regional capacity building efforts.

Co-ordination, liaison and representation

  • Co-ordinate the organisation and preparation for the meetings of the FHTP and TFTC.
  • Liaise with other relevant CTPA Divisions to ensure co-ordination among the different areas of work.
  • Present, discuss and explain the OECD’s work in the area of BEPS and tax and crime at meetings, seminars, conferences and briefings.
  • Lead the organisation of the bi-annual Forum on Tax and Crime.
  • Contribute to other work of the ICA Division and the CTPA when required.
Ideal Candidate Profile
 

Academic Background

  • An advanced university degree or equivalent in taxation,  law, economics, public finance, accounting or business administration.

Professional Background

  • A minimum of  eight years’ relevant experience in a tax administration, Ministry of Finance, financial institution, law or accounting firm, or another type of organisation involved in questions related to base erosion and profit shifting, aggressive tax planning, exchange of information, tax policy analysis and/or similar issues.
  • Proven experience of presenting complex issues at meeting and conferences.
  • Good knowledge of OECD instruments and standards in the tax area.
  • Good knowledge of the principles of international taxation.
Languages
  • Fluency in one of the two OECD official languages (English and French) and knowledge of the other, with a commitment to reach a good working level.
  • Knowledge of other languages would be an asset.
Core Competencies
  • For this role, the following competencies would be particularly important: Achievement focus, Analytical thinking, Drafting skills, Managing resources, Teamwork and Team leadership, Diplomatic sensitivity, Strategic thinking.

Contract Duration

 

18 months fixed term appointment, with the possibility of renewal.

 
 

Monthly base salary starting from 8,200 EUR plus allowances based on eligibility, exempt of French tax.

Please note that the appointment may be made at a lower grade based on the qualifications and professional experience of the selected applicant.
The OECD is an equal opportunity employer and welcomes the applications of all qualified candidates  who are nationals of OECD member countries and nationals of countries participating in the inclusive framework on BEPS irrespective of their racial or ethnic origin, opinions or beliefs, gender, sexual orientation, health or disabilities.
The OECD promotes an optimal use of resources in order to improve its efficiency and effectiveness. Staff members are encouraged to actively contribute to this goal.
 

October 19, 2017 in OECD | Permalink | Comments (0)

Wednesday, October 18, 2017

OECD Hiring Senior Advisor, Global Relations Multilateral Events on Tax Matters

Senior Advisor - Global Relations Multilateral Events, Global Relations and Development Division - CTPA(11694)
 
Description
 

The OECD is a global economic forum working with 35 member countries and more than 100 emerging and developing economies to make better policies for better lives. Our mission is to promote policies that will improve the economic and social well-being of people around the world. The Organisation provides a unique forum in which governments work together to share experiences on what drives economic, social and environmental change, seeking solutions to common problems.

 The OECD has earned a leading role in international tax issues. The Centre for Tax Policy and Administration (CTPA) is the focal point for the OECD’s work on all taxation issues, both international and domestic, and it works to advance the Strategic Orientations of the Secretary General, ensuring impact of the OECD tax work in the international governance architecture, in co-ordination with the OECD Sherpa team. The CTPA also provides support to the OECD’s Committee on Fiscal Affairs (CFA), which consists of senior tax policy and administration officials from OECD countries, Associate and Partner countries and other international and regional tax organisations. Through its work with countries and organisations around the world, the CTPA enhances the OECD’s global role in standard-setting, building knowledge, and influencing policy making in the tax area.

he CTPA is looking for a dynamic and experienced Senior Adviser to co-ordinate and manage an annual Global Relations Programme of approximately 50 multilateral learning and dialogue events on tax matters. The position is based in the recently established Global Relations and Development Division (CTPA/GRD) which combines Global Relations and Tax and Development work, with the aim of exploiting synergies to achieve coherent services and impact for developing countries. The Division leads the OECD’s work to help all countries benefit from OECD standards and policies in taxation. This is achieved through helping to ensure developing countries have a voice in standard-setting bodies established by the OECD; through providing capacity-building support and through co-operation with other international and regional organisations and donors.

 

The successful candidate will have extensive experience in international tax matters, including working for or with developing countries. S/he will provide leadership to develop a programme of events, particularly related to the implementation of the BEPS package. S/he will have the ability to establish and maintain effective working relationships with policymakers and practitioners worldwide. The successful candidate will report directly to the Head of the Division.

 
NB This position requires regular travel to all regions of the world.
 

The vacancy is open to nationals of countries and jurisdictions participating in the Inclusive Framework on BEPS (see link for full list of members)

 
 
Main Responsibilities
 
Leadership
  • Develop and plan a coherent package of capacity-building multilateral programmes, tailored to the needs of developing countries, and selected bilateral programmes with some key partners.  
  • Lead the development of e-learning capacity-building materials and modules for developing countries, taking into account the OECD’s priority areas of international taxation, tax policy and tax administration.
  • Contribute to the development of partnerships with regional tax and political organisations to ensure the globalisation of OECD standards on tax.
Management
  • Manage the annual programme of events, in collaboration with the Multilateral Tax Centres, working closely with divisions and experts for their participation, as required.
  • Manage and motivate a small multicultural, multidisciplinary team of policy analysts and support staff to deliver, monitor and evaluate high quality learning services to developing countries.
  • Manage the production of reports and other products, including reviewing and drafting documents and publications.

Programme Delivery

  • Develop systems and procedures for learning service delivery to developing countries including needs assessment, monitoring, evaluation and reporting.
  • Develop e-learning programmes and the use of digital technology in the needs assessment, delivery, monitoring, evaluation and reporting of multilateral learning services.
Liaison and representation
  • Establish and maintain close contact with national authorities, academics and research institutes, the private sector and other international organisations with expertise and/or interest in working with developing countries on tax matters. 
  • Represent the OECD in internal and external fora, G20, Asia Pacific Economic Co-operation (APEC).
  • Carry out fundraising with donors and other partners.
 

Ideal Candidate Profile

 
Academic Background
  • An advanced university degree in economics, law, accountancy, public finance or a professional qualification in other relevant areas of public policy.
Professional Background
  • A minimum of eight years’ relevant experience in a national administration, international organisation, research institution, university or the private sector.
  • Proven experience in managing and delivering learning services in tax policy or administration, working in or with developing countries.
  • A broad knowledge of the OECD's substantive work, and a strategic sense of the role of the OECD in the overall framework of international co-operation and domestic policy formulation.
Languages
  • Fluency in one of the two OECD official languages (English and French) and knowledge of the other, with a commitment to reach a good working level.
  • Knowledge of other languages (particularly Spanish) would be an asset
 

Core Competencies

  • For this role, the following competencies would be particularly important: Achievement focus, Drafting skills, Managing resources, Teamwork and Team leadership, Strategic Thinking and Strategic Networking.
  • Please refer to the OECD Core Competencies and the level 4 indicators.
 
Contract Duration
 
  • Two year fixed-term appointment, with the possibility of renewal.
 

What the OECD offers 

  • Monthly base salary starting from 8,200 EUR plus allowances based on eligibility, exempt of French tax.
 

Please note that the appointment may be made at a lower grade based on the qualifications and professional experience of the selected applicant.

 

The OECD is an equal opportunity employer and welcomes the applications of all qualified candidates  who are nationals of OECD member countries and nationals of countries and jurisdictions participating in the inclusive framework on BEPS irrespective of their racial or ethnic origin, opinions or beliefs, gender, sexual orientation, health or disabilities.

 

The OECD promotes an optimal use of resources in order to improve its efficiency and effectiveness. Staff members are encouraged to actively contribute to this goal.

October 18, 2017 in OECD | Permalink | Comments (0)

Tuesday, October 17, 2017

Governments rapidly dismantling harmful tax incentives worldwide: BEPS Project driving major changes to international tax rules

Governments have dismantled, or are in the process of amending, nearly 100 preferential tax regimes as part of the OECD/G20 BEPS standards to improve the international tax OECD_globe_10cm_HD_4cframework, according to a progress report released today.

The report provides details on the outcome of peer reviews undertaken of 164 preferential tax regimes identified amongst the more than 100 jurisdictions participating in the OECD Inclusive Framework on BEPS.

The OECD/G20 BEPS Project delivers solutions for governments to close the gaps in existing international rules that allow corporate profits to “disappear” or be artificially shifted to low or no tax environments, where companies have little or no economic activity. Revenue losses from BEPS are conservatively estimated at USD 100-240 billion annually, or the equivalent of 4-10% of global corporate income tax revenues.

The BEPS Action 5 standard covers tax incentives (“preferential tax regimes”) that apply to mobile business income, such as financial and services income and income from intellectual property, which multinationals can shift with relative ease. To avoid a race to the bottom and negative spillover effects on other jurisdictions' tax bases, all 102 members of the BEPS Inclusive Framework have committed to ensuring that any regimes offered meet the criteria that have been agreed as part of BEPS Action 5. Crucially, this includes a requirement that taxpayers benefiting from a regime must themselves undertake the core business activity, ensuring the alignment of taxation with genuine business substance.

The Action 5 Progress Report on Preferential Tax Regimes includes the review of 164 preferential tax regimes offered by Inclusive Framework members against the Action 5 standard.

Of the 164 regimes reviewed in the last twelve months: 

  • 99 require action;
  • For 93 of these 99 regimes, the required changes have already been completed or initiated by Inclusive Framework members,
  • 56 regimes do not pose a BEPS risk,
  • 9 regimes are still under review, due to extenuating circumstances such as the impact of the recent hurricanes on certain Caribbean jurisdictions.

"Harmful tax practices are a particularly aggressive way through which jurisdictions can encourage the erosion of other jurisdictions' tax bases," said Martin Kreienbaum, Chair of the Inclusive Framework on BEPS. "It is critical that they be addressed, to protect the level playing field and prevent a race to the bottom. The Inclusive Framework's peer reviews are resulting in real changes to these tax incentives, making it harder for multinationals to artificially shift their profits around the world for a tax advantage."

"These outcomes demonstrate that the political commitments of members of the Inclusive Framework are rapidly resulting in measureable, tangible progress" said Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration. "The jurisdictions concerned are already working to address the harmful tax practices in their preferential regimes. In fact, countries have already changed or are changing almost 95 percent of the regimes where action is needed."

Inclusive Framework members have agreed an ambitious timeline, whereby jurisdictions whose regimes have harmful features are expected to adjust their regimes as soon as possible and generally no later than October 2018. The OECD will continue to publish the results of reviews of preferential regimes and the progress that jurisdictions are making to adjust them to reduce the risks posed to tax bases.

October 17, 2017 in OECD | Permalink | Comments (0)

Thursday, September 14, 2017

Countries have continued the trend towards implementing tax policy reforms as part of wider strategies to boost growth, with a growing focus on reducing inequalities and driving behavioural change, according to a new report from the OECD.

Tax Policy Reforms: OECD and Selected Partner Economies describes the major tax reforms that were implemented, legislated or announced in 2016 across the 35 OECD members OECDas well as in Argentina and South Africa. The report identifies major tax policy trends and highlights that tax is increasingly being used as a key policy lever in the inclusive economic growth strategies of many countries.

Countries have continued the trend towards implementing tax policy reforms as part of wider strategies to boost growth, with a growing focus on reducing inequalities and driving behavioural change, according to a new report from the OECD.
 
Tax Policy Reforms: OECD and Selected Partner Economies describes the major tax reforms that were implemented, legislated or announced in 2016 across the 35 OECD members as well as in Argentina and South Africa. The report identifies major tax policy trends and highlights that tax is increasingly being used as a key policy lever in the inclusive economic growth strategies of many countries.

Growth-stimulus through the tax system is being driven by cuts in corporate income tax rates, with 12 countries taking steps toward lower standard corporate tax rates during 2016, often as part of a gradual multi-year corporate tax reform. This continues a trend toward increased international tax competition identified in last year’s publication. At the same time, international cooperation to tackle base erosion and profit shifting (BEPS) is increasing, with countries implementing internationally agreed measures to protect their corporate tax bases against international tax avoidance.

“Governments are rightly placing growth and inclusiveness at the heart of their tax reform efforts,” said OECD Secretary-General Angel Gurría. “Monitoring changes in the global tax policy landscape provides high-quality information on the trends shaping tax policy, which can help policy makers with the design and assessment of future reforms for the benefit of their citizens.”

Personal income tax cuts were enacted in many countries in 2016, generally increasing the progressivity of tax systems. This included cuts in personal income tax rates on low or middle income earners in 15 countries. Nonetheless, taxes on labour remain high overall and, with a few exceptions, there were only limited reductions in social security contributions in 2016.

“With taxes on labour remaining high in many countries, further action will be required to enhance incentives for employment and the creation of jobs so that tax systems become more conducive to inclusive growth,” said Mr Gurría.

The tax mix continues to shift towards labour and consumption taxes, although standard VAT-rates appear to have stabilised in 2016, with only one country (Greece) introducing an increase to its standard VAT rate. We are also seeing widespread implementation of the International VAT/GST Guidelines.

Excise duties, particularly on tobacco, as well as taxes targeting transport fuels generally increased in 2016, as did incentives for the purchase and use of electric and hybrid vehicles. However, fuels used outside of the transport sector, which also cause considerable harm to the environment, continue to be taxed at relatively low rates.

Changes to property-related taxes increased in 2016, when compared to 2015, with a number of governments increasing recurrent taxes on immovable property, as well as introducing transaction taxes on both movable and immovable property.

September 14, 2017 in OECD | Permalink | Comments (0)

Thursday, July 27, 2017

OECD releases further guidance for tax administrations and MNE Groups on Country-by-Country reporting (BEPS Action 13)

The Inclusive Framework on BEPS has released additional guidance to give certainty to tax administrations and MNE Groups alike on the implementation of Country-by-Country (CbC) Reporting (BEPS Action 13).

The additional guidance addresses two specific issues: how to treat an entity owned and/or operated by two or more unrelated MNE Groups, and whether aggregated data or consolidated data for each jurisdiction is to be reported in Table 1 of the CbC report.

The complete set of guidance related to CbC reporting issued so far is presented in the document released today. This will continue to be updated with any further guidance that may be agreed.

The BEPS Action 13 report (Transfer Pricing Documentation and Country-by-Country Reporting) provides a template for multinational enterprises (MNEs) to report annually and for each tax jurisdiction in which they do business the information set out therein. This report is called the Country-by-Country (CbC) Report.

To facilitate the implementation of the CbC reporting standard, the BEPS Action 13 report includes a CbC Reporting Implementation Package which consists of (i) model legislation which could be used by countries to require the ultimate parent entity of an MNE group to file the CbC report in its jurisdiction of residence including backup filing requirements and (ii) three model Competent Authority Agreements that could be used to facilitate implementation of the exchange of CbC reports, respectively based on the:

  1. Multilateral Convention on Administrative Assistance in Tax Matters;
  2. Bilateral tax conventions; and
  3. Tax Information Exchange Agreements (TIEAs).

As jurisdictions have moved into the implementation stage, some questions of interpretation have arisen. In the interests of consistent implementation and certainty for both tax administrations and taxpayers, the Inclusive Framework on BEPS has issued guidance to address certain key questions. This guidance is periodically updated.

July 27, 2017 in BEPS, OECD | Permalink | Comments (0)

Tuesday, July 18, 2017

Mauritius signs the multilateral BEPS Convention to tackle tax avoidance by multinational enterprises

Mahess Rawoteea of the Ministry of Finance and Economic Development of Mauritius, signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the MLI) in the presence of Douglas Frantz, OECD Deputy Secretary-General.

Based on expressed reservations at this point in time, 23 tax treaties would be impacted by this signing. We note that Mauritius issued a statement today, reaffirming its commitment to OECD implement the minimum standards developed in the course of the OECD/G20 BEPS Project into its entire tax treaty network by the end of 2018. Mauritius has committed to modify its remaining tax treaties through bilateral negotiations. 

The  MLI is a legal instrument designed to prevent base erosion and profit shifting (BEPS) by multinational enterprises. BEPS refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations. The MLI allows jurisdictions to transpose results from the OECD/G20 BEPS Project, including minimum standards to implement in tax treaties to prevent treaty abuse and “treaty shopping”, into their existing networks of bilateral tax treaties in a quick and efficient manner. It was developed through inclusive negotiations involving more than 100 countries and jurisdictions, under a mandate delivered by G20 Finance Ministers and Central Bank Governors at their February 2015 meeting.

The OECD is the depositary of the MLI and is supporting governments in the process of signature, ratification and implementation. The 69 jurisdictions participating in the MLI and the position of each Party and Signatory under the Convention are available on the OECD website.

The text of the MLI, the explanatory statement and background information are available at: oe.cd/mli.

July 18, 2017 in BEPS, OECD | Permalink | Comments (0)

Monday, July 17, 2017

Public comments published on the BEPS discussion draft on the Implementation Guidance on Hard-to-Value Intangibles

On 23 May 2017, interested parties were invited to provide comments on a discussion draft that provides guidance on the implementation of the approach to pricing transfers of hard-to-value intangibles described in Chapter VI of the Transfer Pricing Guidelines. The OECD is grateful to the commentators for their input and now publishes the public comments received.

Download Public-comments-received-on-the-Implementation-Guidance-on-Hard-to-Value-Intangibles-2017

July 17, 2017 in BEPS, OECD | Permalink | Comments (0)

Sunday, July 16, 2017

OECD reports major progress reported towards a fairer and more effective international tax system

Countries are making major progress towards the goal of creating a fairer and more effective international tax system, including increasing efforts to close down loopholes, improve OECDtransparency and ensure that multinational enterprises pay tax where they carry out their activities, according to a new OECD report.

The latest Report from OECD Secretary-General Angel Gurría to G20 Leaders  describes the continuing fight against tax avoidance and tax evasion as one of the major success stories of the G20, founded on enhanced international co-operation.  The report, released today, updates progress in key areas of OECD-G20 tax work, including movement towards automatic exchange of information between tax authorities and implementation of key measures to address tax avoidance by multinationals.

“Tax issues have been a key priority of the G20 since its inception, and 2017 is the year of implementation,” Mr Gurría said. “In the midst of the backlash against globalisation, we need to deliver on an agenda of inclusive growth. The work of the G20 and the OECD to repair and improve the international tax system so everyone pays their fair share remains one of the most important responses to these challenges, as well as one which is having a concrete impact.”

The report to G20 Leaders highlights progress in each of the areas where OECD has been mandated to boost international co-operation on tax issues.  This includes ongoing movement towards greater transparency, principally through the work of the OECD-hosted Global Forum on Transparency and Exchange of Information for Tax Purposes, which now includes 142 members and is managing worldwide implementation of the Common Reporting Standard and the first automatic exchanges of financial account information (AEOI), to take place in September 2017.

Global Forum members have established close to 2 000 bilateral exchange relationships for AEOI. “These efforts are already paying off, with 500 000 people having disclosed offshore assets and around EUR 85 billion in additional tax revenue identified as a result of voluntary compliance mechanisms and offshore investigations,” Mr Gurría said.

Implementation also continues on measures to reduce tax avoidance by multinational enterprises under the G20/OECD Base Erosion and Profit Shifting (BEPS) Project. 101 countries and jurisdictions are now working on an equal footing to set standards and monitor implementation via the OECD/G20 Inclusive Framework on BEPS. The OECD has established a peer review process to assess implementation of the BEPS minimum standards and work continues on pending issues including transfer pricing.

At the same time, countries are considering measures to enhance tax certainty based on the joint OECD-IMF report  to G20 Finance Ministers  in March, as well as progressing discussions on the complex issues around taxation of the digital economy. An interim report on taxation of the digital economy will be delivered by the OECD/G20 Inclusive Framework on BEPS in early 2018, followed by a final report in 2020.

July 16, 2017 in GATCA, OECD | Permalink | Comments (0)

Saturday, July 15, 2017

Barbados joins the OECD Inclusive Framework on BEPS

Barbados has become the 101st jurisdiction to join the Inclusive Framework on BEPS ("IF"). The IF was established in January 2016, after the G20 Leaders urged the timely OECDimplementation of the BEPS package released in October 2015 and called on the OECD to develop a more inclusive framework with the involvement of interested non-G20 countries and jurisdictions, including developing economies. The first progress report produced by the Inclusive Framework will be published tomorrow.

By joining the Inclusive Framework, Barbados will work on an equal footing with all other Inclusive Framework members on the implementation of the BEPS package and on developing further standards to address the remaining BEPS issues. The full list of members of the IF can be found at: www.oecd.org/tax/beps/inclusive-framework-on-beps-composition.pdf

Barbados has a long experience in working on international tax matters having joined the Global Forum on Transparency and Exchange of Information for Tax Purposes in September 2009 and having received a "Largely Compliant" rating in 2016, as well as having ratified the Multilateral Convention on Mutual Administrative Assistance in Tax Matters in 2016, which now has includes over 110 countries and jurisdictions, and having signed the CRS Multilateral Competent Authority Agreement‎ (CRS MCAA), to enable it to fulfil its commitment to implementing the automatic exchange of financial account information pursuant to the OECD/G20 Common Reporting Standard (CRS) in time to commence exchanges in 2018.

July 15, 2017 in BEPS, OECD | Permalink | Comments (0)

Friday, July 14, 2017

New head appointed for OECD tax treaty unit

Sophie Chatel has been appointed Head of the Tax Treaty Unit in the Centre for Tax Policy and Administration. She will take up her duties on 6 September 2017. Sophie-chatel-220px

A Canadian national, Sophie has been working at Canada’s Department of Finance since 2008, where she served as Associate Chief – Tax Treaties and International Tax.  In this capacity she has played a key role in the international tax policy work of the Canadian government. 

Sophie has also worked at the Canada Revenue Agency, most recently in 2015-16 as Director, International Tax, Financial Sector and GST Division, where she supervised the resolution of Canada’s tax disputes with multinational enterprises in complex international tax cases. From 2002 to 2008 she was a Senior Officer and then Senior Advisor at the CRA, where her experience included negotiating tax treaties, reviewing Canada’s model tax treaty, and working on advance rulings on international tax matters. Earlier in her career she spent six years as a tax advisor in the private sector.

Sophie holds a law degree from the University of Montreal and a master’s degree in taxation from the University of Sherbrooke. She is also a member of the Chartered Professional Accountants of Canada.

She has been a participant in the work of the OECD, the UN Committee of Experts on International Taxation, and as a tax policy and capacity building expert she has also worked with the IMF and the Inter-American Center of Tax Administrations (CIAT).

July 14, 2017 in OECD | Permalink | Comments (0)

Wednesday, July 12, 2017

OECD contends strong progress seen on international tax transparency

Tax evasion continues to challenge governments in developing and developed countries alike, depriving them of resources that would otherwise be available to support sustainable OECDdevelopment through investments in infrastructure, health and other common goods. While globalisation has brought many opportunities and advances, its dark side has included the greater ease with which individuals can shift income and assets offshore and out of sight of tax authorities.

The OECD-hosted Global Forum on Transparency and Exchange of Information for Tax Purposes has been working to enhance global tax transparency, end banking secrecy and protect public finances by curtailing tax evasion since 2008. It has developed a series of international tax transparency standards and constantly monitors and reviews implementation and adhesion by its 142 members. It is part of the international efforts on tax transparency that also include the OECD/G20 BEPS Initiative.

In July 2016, G20 countries called on the Global Forum to devise objective criteria to identify jurisdictions that have not made sufficient progress toward a satisfactory level of implementation of the agreed international standards. These include those on Exchange of Information on Request (EOIR) and Automatic Exchange of Information (AEOI).

A list of non-cooperative jurisdictions was to be prepared for the G20 Leaders Summit in Hamburg in July 2017, with jurisdictions needing to meet at least two of the three benchmarks to avoid inclusion:

i.         at least a “Largely Compliant” rating with respect to the Exchange Of Information on Request standard;

ii.        a commitment to implement the Automatic Exchange Of Information standard, with first exchanges in 2018 (with respect to the year 2017) at the latest; and

iii.       Participation in the Multilateral Convention on Mutual Administrative Assistance on Tax Matters or a sufficiently broad exchange network permitting both EOIR and AEOI. 

In addition, an overriding criterion applies in the case where a jurisdiction is determined by the Global Forum peer review process to be “non-compliant”, or is blocked from moving past Phase 1 of the EOI standard, or where it was previously blocked from moving past Phase 1 and has not yet received an overall rating under the Phase 2 process.

The Global Forum established a Fast-Track review process to evaluate continuing efforts by some jurisdictions to meet transparency standards in the run-up to the G20 Summit.  The latest results of the Fast Track review show that progress has now been made by most jurisdictions in meeting the international tax transparency standards.

Fifteen jurisdictions which previously had a less than satisfactory rating on their peer reviews against the EOIR standard, were evaluated to assess whether recent progress would upgrade their rating if they were to be reviewed again.

Following the evaluation, the Global Forum assigned the following provisional ratings:

Largely Compliant - Andorra, Antigua and Barbuda, Costa Rica, Dominica, the Dominican Republic, Guatemala, the Federated States of Micronesia, Lebanon, Nauru, Panama, Samoa, the United Arab Emirates and Vanuatu.

Partially Compliant -  Marshall Islands.

Trinidad and Tobago, which previously had a rating of Non-Compliant, was unable to demonstrate progress to warrant any upgrade to its rating.   

Applying the objective criteria, and taking into account the fast track reviews, Trinidad and Tobago has been identified as the only jurisdiction which has not yet made sufficient progress towards satisfactory implementation of the tax transparency standards. Discussions are continuing with Trinidad and Tobago, and progress is anticipated soon.

The Global Forum’s fast track process was a rigorous process and informed by peer input but does not substitute a full peer review. In all cases a full review will be carried out and a peer evaluation done against the revised international standard for exchange of information on request, which now includes the requirement of beneficial ownership.

The provisional ratings reflect the strong progress made by the jurisdictions in implementing the EOIR Standard. A number of critical changes have been introduced by the reviewed jurisdictions, including the elimination of strict bank secrecy and bearer shares, improved access to accounting records and a more rigorous oversight and enforcement of obligations to maintain information. Further progress has also been achieved on expanding the breadth of the exchange networks including signature of the Multilateral Convention on Mutual Administrative Assistance on Tax Matters.

These fast track results mark the end of the first round of EOIR peer reviews, and will be delivered to the G20 Leaders Summit on 7-8 July 2017 in Hamburg, Germany. A second round of peer reviews is now underway, with the first outcomes to be released later this year. Jurisdictions which benefited from fast track will be reviewed early in the second round review process.

A Background Note on continuing progress on tax transparency is available at: http://www.oecd.org/tax/transparency/brief-and-FAQ-on-progress-on-tax-transparency.pdf

July 12, 2017 in BEPS, OECD | Permalink | Comments (0)

Tuesday, July 11, 2017

OECD releases the draft contents of the 2017 update to the OECD Model Tax Convention

The OECD Committee on Fiscal Affairs has just released the draft contents of the 2017 update to the OECD Model Tax Convention prepared by the OECDCommittee's Working Party 1. The update has not yet been approved by the Committee on Fiscal Affairs or by the OECD Council, although, as noted below, significant parts of the 2017 update were previously approved as part of the BEPS Package.  It will be submitted for the approval of the Committee on Fiscal Affairs and of the OECD Council later in 2017. This draft therefore does not necessarily reflect the final views of the OECD and its member countries.

Comments are requested at this time only with respect to certain parts of the 2017 update that have not previously been released for comments. These changes are as follows:

  • Changes to paragraph 13 of the Commentary on Article 4 related to the issue whether a house rented to an unrelated person can be considered to be a “permanent home available to” the landlord for purposes of the tie-breaker rule in Article 4(2) a).
  • Changes to paragraphs 17 and 19 of, and the addition of new paragraph 19.1 to, the Commentary on Article 4. These changes are intended to clarify the meaning of “habitual abode” in the tie-breaker rule in Article 4(2) c).
  • The addition of new paragraph 1.1 to the Commentary on Article 5. That paragraph indicates that registration for the purposes of a value added tax or goods and services tax is, by itself, irrelevant for the purposes of the application and interpretation of the permanent establishment definition.
  • Deletion of the parenthetical reference “(other than a partnership)” from subparagraph 2 a) of Article 10, which is intended to ensure that the reduced rate of source taxation on dividends provided by that subparagraph is applicable in the case where new Article 1(2) would have the effect that a dividend paid to a transparent entity would be considered to be income of a resident of a Contracting State because it is taxed either in the hands of the entity or in the hands of the members of that entity. That deletion is accompanied by new paragraphs 11 and 11.1 of the Commentary on Article 10.

Comments are not requested with respect to changes to the OECD Model Tax Convention that have been approved as part of the BEPS Package, were foreseen as part of the follow-up work on the treaty-related BEPS measures and/or were previously released for comments. These changes — which are released for information — include the following:

As part of the 2017 update, a number of changes and additions will also be made to the observations, reservations and positions of OECD member countries and non-member economies. These changes and additions are in the process of being formulated and will be included in the final version of the 2017 update.

Comments should be sent electronically in Word format by 10 August 2017 to taxtreaties@oecd.org. Comments should be addressed to the Tax Treaties, Transfer Pricing and Financial Transactions Division, OECD/CTPA.

All responses to this consultation document will be made publicly available. Responses submitted in the name of a collective “grouping” or “coalition”, or by any person submitting responses on behalf of another person or group of persons, should identify all enterprises or individuals who are members of that collective group, or the person(s) on whose behalf the commentator(s) are acting.

July 11, 2017 in BEPS, OECD | Permalink | Comments (0)