International Financial Law Prof Blog

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

Tuesday, July 28, 2020

Georgia commits to implement international standard on automatic exchange of financial information by 2023

On 8 June 2020, the Honourable Ivane Matchavariani, Minister of Finance of Georgia, committed to implement the international standard on automatic exchange of financial account information by 2023. This powerful new tool will not only generate additional taxable revenues for Georgia by allowing it to identify cases of tax evasion but also drive changes in taxpayer behaviour.

The Honourable Ivane Matchavariani stated “As a member of Global Forum, Georgia stays committed to implementing the global standards on tax transparency and exchange of information for tax purposes and wishes to formally express its commitment to implement the Standard for Automatic Exchange of Financial Information in Tax Matters (the AEOI Standard). Our intention is to begin the first exchanges under the AEOI Standard in September 2023.”

The Global Forum welcomes Georgia’s commitment as it joins 112 other jurisdictions which have committed to AEOI.

The Global Forum Secretariat will continue to provide technical assistance support for Georgia as it moves to implement AEOI, including within the AEOI pilot project. The pilot project is a partnership between Georgia, Germany and the Global Forum Secretariat, to support the implementation of AEOI in Georgia.

» Read the 2019 AEOI implementation report

July 28, 2020 in GATCA, OECD | Permalink | Comments (0)

Friday, July 17, 2020

Oman deposits its instrument of ratification for the Multilateral BEPS Convention

Oman deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (Multilateral Convention or MLI) with the OECD’s Secretary-General, Angel Gurría, thus underlining its strong commitment to prevent the abuse of tax treaties and base erosion and profit shifting (BEPS) by multinational enterprises. For Oman, the MLI will enter into force on 1 November 2020.

With 94 jurisdictions currently covered by the MLI, today’s ratification by Oman now brings to 49 the number of jurisdictions which have ratified, accepted or approved it.

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

Texas A&M International Tax Risk Management programTexas A&M University School of Law has launched its online international tax risk management graduate curricula for industry professionals.

Apply now for courses that begin August 23: International Tax Risk Management, Data, and Analytics; International Tax & Tax Treaties (complete list here

 

July 17, 2020 in BEPS, OECD | Permalink | Comments (0)

Sunday, July 12, 2020

Enhancing Reputational Risk Management for Tax Administrations

The OECD Forum on Tax Administration (FTA) today released a report on reputational risk management, highlighting its importance for protecting and enhancing tax compliance, including in the COVID-19 environment. The report, led by the Canada Revenue Agency and the FTA's Enterprise Risk Management Community of Interest, sets out the key considerations for developing and improving reputational risk management practices within tax administrations. It also introduces a reputational risk management maturity model, allowing administrations to self-assess their current capabilities and facilitating consideration of how and where improvements might be made. 

"Tax administrations more than ever have to ensure that they have the trust and respect of their taxpayer and stakeholder populations to achieve our objectives, something highlighted by the current crisis," said Bob Hamilton, Commissioner at the Canada Revenue Agency. "The joint work done with other FTA administrations on how to think about, measure and proactively address reputational risk will help to provide confidence and trust during the COVID-19 crisis and recovery, and could have long lasting positive impacts on the relationship between tax administrations and taxpayers."

"In the COVID-19 crisis tax administrations have been playing a central role in supporting taxpayers and the wider economy" said Pascal Saint-Amans, the Director of the OECD Centre for Tax Policy and Administration. "While this may have had positive impacts on the reputation of tax administrations and on compliance attitudes, that can easily change, and potentially dramatically, in such a difficult and fluid environment and therefore requires both careful consideration and active management".

This report highlights the importance of reputational risk management in modern tax administration and sets out some key considerations as to how to identify and manage reputational risks. It also contains a set of tools to assist tax administrations in developing their capacity in this area including a maturity model which allows administrations to self-assess their current capacity and to identify areas for possible further development. The report has been produced by the FTA Enterprise Risk Management Community of Interest (COI). It is the first in an intended series of reports by the FTA's Communities of Interest which bring together experts to exchange views and work collaboratively on major themes of modern tax administration.

This work was led within the Enterprise Risk Management COI by colleagues from the Canada Revenue Agency. As noted in the report, managing reputational risk is hugely important in helping to achieve the objectives of tax administration and wider government, something which is particularly true in times of crisis. The key principles driving reputational risk are trust in the administration and its staff and respect towards the organisation. When an administration consistently abides by its ethical duties, it establishes trust in the eyes of taxpayers and other stakeholders. When it fails to meet the standards expected of it, particularly with respect to the fair and equal treatment of taxpayers, public trust and credibility can be quickly eroded.

Download the report (PDF)

Texas A&M International Tax Risk Management programTexas A&M University School of Law has launched its online international tax risk management graduate curricula for industry professionals.

Apply now for courses that begin August 23: International Tax Risk Management, Data, and Analytics; International Tax & Tax Treaties (complete list here

Texas A&M University is a public university, ranked in the top 20 universities by the Wall Street Journal / Times Higher Education university rankings, and is ranked 1st among public universities for its superior education at an affordable cost (Fiske, 2018) and ranked 1st of Texas public universities for best value (Money, 2018).

July 12, 2020 in OECD | Permalink | Comments (0)

Friday, July 3, 2020

OECD releases global tax reporting framework for digital platforms in the sharing and gig economy

Today, the OECD has released a new global tax reporting framework, the Model Rules for Reporting by Platform Operators with respect to Sellers in the Sharing and Gig Economy ("MRDP"). Under the MRDP, digital platforms are required to collect information on the income realised by those offering accommodation, transport and personal services through platforms and to report the information to tax authorities.

With the digitalisation of the economy transactions that take place on platforms may not always be reported to tax administrations, either by third parties or by the taxpayers themselves. The platform economy also means increased access to information for tax administrations, as it brings activities previously carried out in the informal cash economy onto digital platforms.

The MRDP are designed to help taxpayers in being compliant with their tax obligations, while ensuring a level-playing field with traditional businesses, in key sectors of the sharing and gig economy. They further seek to avoid a proliferation of different and unilateral reporting regimes, allow for the use of novel technology solutions and help create a sustainable environment supporting the growth of the digital economy.

"The approval of the MRDP by the G20/OECD Inclusive Framework on BEPS proves that multilateral solutions to address tax challenges in the digital economy are possible and that they are to the benefit of tax administrations, taxpayers and businesses alike", said Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration.

The MRDP are part of a wider strategy of the OECD to address the tax challenges arising from the digitalisation of the economy and are designed to serve as a basis for further policy developments in increasing tax transparency to create a stable environment for the growth of the digital economy. They were developed in response to calls for a global reporting framework for digital platforms, as reflected in the 2018 OECD report to the G20 on Tax Challenges Arising from Digitalisation, as well as in the 2019 report on The Sharing and Gig Economy: Effective Taxation of Platform Sellers by the OECD Forum on Tax Administration, which brings together over 50 of the world’s most advanced tax administrations.

To support the swift and coherent implementation of the MRDP, the OECD will now take forward work on the international legal and technical framework to facilitate the automatic exchange of the information collected under the MRDP.

Texas A&M International Tax Risk Management programTexas A&M University School of Law has launched its online international tax risk management graduate curricula for industry professionals.

Apply now for courses that begin August 23: International Tax Risk Management, Data, and Analytics; International Tax & Tax Treaties (complete list here

Texas A&M University is a public university, ranked in the top 20 universities by the Wall Street Journal / Times Higher Education university rankings, and is ranked 1st among public universities for its superior education at an affordable cost (Fiske, 2018) and ranked 1st of Texas public universities for best value (Money, 2018).

July 3, 2020 in OECD | Permalink | Comments (0)

Friday, June 5, 2020

Platform for Collaboration on Tax releases toolkit to help developing countries tackle the complex issues around taxing offshore indirect transfers of assets

The Platform for Collaboration on Tax (PCT) released a Toolkit on the Taxation of Offshore Indirect Transfers (OIT) providing guidance on the design and implementation issues when one country seeks to tax gains on the sale of interests in an entity owning assets located in that country by an entity which is a tax resident in another country. This is the third Toolkit1 published by the PCT to provide guidance on areas of international taxation of particular concern to developing countries.

This toolkit addresses a concern of particular significance to developing countries, mostly but not exclusively natural resource rich countries—primarily from the perspective of the country where the underlying assets are located. Taxation of the indirect transfer of assets such as mineral rights, and other assets generating location specific such as licensing rights for telecommunications, has been the subject of protracted public interest. This topic is a concern in many developing countries, magnified by the revenue challenges that governments around the world face as a consequence of the COVID-19 crisis.

The significance of this issue was recognised in the development of the OECD led Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (the "MLI"). The MLI includes a provision based upon the OECD and UN model tax conventions, for purposes of extending the reach of existing tax treaties to allocate rights to tax such indirect transfers to location countries, should treaty partners so choose.

The toolkit assesses the economic rationale for such an allocation of taxing rights on such transfers to the country where the underlying assets are located. The toolkit proposes that location countries may wish to tax offshore indirect transfers of at least those assets which are immovable—within the meaning of current UN and OECD model treaties—and perhaps additional assets that also generate location specific rents. If location countries do wish to extend taxing rights to such transfers the toolkit suggests two models for domestic legislation which such countries may adopt.

The first model seeks to tax the resident asset owner under the deemed disposal model- treating it as having realised the gain on the assets in question immediately before the transfer and reacquired the asset immediately after the transfer. The second model seeks to tax instead the non-resident seller of the asset. The toolkit also suggests a model definition of immovable property for the purposes of such domestic legislation and provides further guidance to support enforcement and collection.

This toolkit takes into account extensive comments received during two rounds of public consultation in 2017 and 2018 from numerous groups representing country authorities, civil society organisation and the private sector.

The launch of this toolkit will be complemented with a launch webinar in the coming weeks. French and Spanish versions of the toolkit will follow, as well as virtual learning opportunities based on the toolkit.

The PCT is a joint initiative of the International Monetary Fund (IMF), the Organisation for Economic Cooperation and Development (OECD), the United Nations (UN) and the World Bank Group (WBG). More information can be found on the PCT's official website.

1 The PCT released a toolkit on Options for Low Income Countries' Effective and Efficient Use of Tax Incentives for Investment in 2015, and another for Addressing Difficulties in Accessing Comparables Data for Transfer Pricing Analyses in 2017. Others are in varying stages of development and public comment.

June 5, 2020 in BEPS, OECD | Permalink | Comments (0)

Thursday, April 9, 2020

OECD issues recommendations on implications of the COVID-19 crisis on cross-border workers and other related cross-border matters

The COVID-19 pandemic has forced governments to take strict and in some cases unprecedented measures to protect their citizens, economies and societies, such as restricting or stopping travel and implementing strict quarantine requirements. In this difficult context, most countries are putting stimulus packages in place, including measures to support employment, for example, taking on the burden of unpaid salaries on behalf of companies suffering from the economic downturn resulting from the COVID-19 pandemic. As a result of these restrictions, many cross-border workers are unable to physically perform their duties in their country of employment. They may have to stay at home and telework, or may be laid off because of the exceptional economic circumstances.

This unusual situation is raising many tax issues, especially where there are cross-border elements in the equation; for example, cross-border workers, or individuals who are stranded in a country that is not their country of residence. These issues have an impact on the right to tax between countries, which is currently governed by international tax treaty rules that delineate taxing rights.

The exceptional circumstances of the COVID-19 crisis call for an exceptional level of coordination and co-operation between countries, notably on tax issues, to mitigate the potentially significant compliance and administrative costs for employees and employers. The OECD encourages countries to work together to alleviate the unplanned tax implications and potential new burdens arising due to effects of the COVID-19 crisis. 

At the request of concerned countries, the OECD Secretariat has issued guidance on these issues based on a careful analysis of the international tax treaty rules.

This guidance deals with concrete situations. Take these two examples:

  • Mr. X, is stranded for a period in a country that is not his country of residence due to the travel restrictions and quarantine measures. The challenge here is to determine the place of residence of individuals for tax purposes. In this case, the OECD Secretariat’s general view is that, under the bilateral tax treaty between the two countries, Mr. X’s residence will not change due to such temporary dislocation. The OECD recommends countries of temporary residence to apply their domestic rules accordingly.
  • Ms. F, who is a cross-border worker, is quarantined in her country of residence and temporarily out of work due to the COVID-19 crisis. Thanks to the stimulus package adopted in the country of her employer, she continues to receive her salary from her employer. The challenge in this case concerns the taxation of her salary received due to a stimulus package. In this case, the OECD Secretariat’s general view is that her income will continue to be taxed as it was prior to the COVID-19 crisis, that is in the country where she used to exercise her employment.

The guidance also deals with issues affecting the residence of companies for tax purposes, where their management is carried out in another country due to the travel and quarantine restrictions. It examines teleworking, for instance, and the implications for companies of having cross-border employees telework in their home country and therefore performing their duties there. In these situations, the OECD Secretariat’s general view is that these special circumstances should not affect the residence status of companies under the international tax treaty rules.

The OECD has announced it is urgently working on other concerns raised by businesses, taxpayers and tax administrations due to the COVID-19 crisis, on the taxation of cross-border workers teleworking in their home country and individuals affected by countries’ domestic residence rules triggered by the impacts of travel and quarantine restrictions. 

April 9, 2020 in OECD | Permalink | Comments (0)

Thursday, March 12, 2020

Public comments received on the 2020 Review of Country-by-Country Reporting (BEPS Action 13 Minimum Standard)

Update 12/03/2020: Comments have been added/replaced in their respective folders within the ZIP file. Please consult the "Read me" file for a description of all updates. 

March 12, 2020 in OECD | Permalink | Comments (0)

Tuesday, February 11, 2020

Final OECD Transfer Pricing Guidance on Financial Transactions: Inclusive Framework on BEPS: Actions 4, 8-10

The report is significant because it is the first time the OECD Transfer Pricing Guidelines include guidance on the transfer pricing aspects of financial transactions, which will contribute to consistency in the interpretation of the arm’s length principle and help avoid transfer pricing disputes and double taxation.

The guidance in this report describes the transfer pricing aspects of financial transactions. It also includes a number of examples to illustrate the principles discussed in the report. Section B provides guidance on the application of the principles contained in Section D.1 of Chapter I of the OECD Transfer Pricing Guidelines to financial transactions. In particular, Section B.1 of this report elaborates on how the accurate delineation analysis under Chapter I applies to the capital structure of an MNE within an MNE group. It also clarifies that the guidance included in that section does not prevent countries from implementing approaches to address capital structure and interest deductibility under their domestic legislation. Section B.2 outlines the economically relevant characteristics that inform the analysis of the terms and conditions of financial transactions. Sections C, D and E address specific issues related to the pricing of financial transactions (e.g. treasury functions, intra-group loans, cash pooling, hedging, guarantees and captive insurance). This analysis elaborates on both the accurate delineation and the pricing of the controlled financial transactions. Finally, Section F provides guidance on how to determine a risk-free rate of return and a risk-adjusted rate of return.

Sections A to E of this report are included in the Guidelines as Chapter X. Section F is added to Section D.1.2.1 in Chapter I of the Guidelines, immediately following paragraph 1.106. The guidance describes the transfer pricing aspects of financial transactions and includes a number of examples to illustrate the principles discussed in this report. 

Download Transfer-pricing-guidance-on-financial-transactions-inclusive-framework-on-beps-actions-4-8-10

February 11, 2020 in BEPS, OECD | Permalink | Comments (0)

Saturday, February 1, 2020

International community renews commitment to multilateral efforts to address tax challenges from digitalisation of the economy

The international community reaffirmed its commitment to reach a consensus-based long-term solution to the tax challenges arising from the digitalisation of the economy, and will continue working toward an agreement by the end of 2020, according to the Statement by the Inclusive Framework on BEPS released by the OECD Friday.  Download Statement-by-the-oecd-g20-inclusive-framework-on-beps-january-2020

The Inclusive Framework on BEPS, which groups 137 countries and jurisdictions on an equal footing for multilateral negotiation of international tax rules, decided during its Jan. 29-30 meeting to move ahead with a two-pillar negotiation to address the tax challenges of digitalisation. 

Participants agreed to pursue the negotiation of new rules on where tax should be paid ("nexus" rules) and on what portion of profits they should be taxed ("profit allocation" rules), on the basis of a "Unified Approach" on Pillar One, to ensure that MNEs conducting sustained and significant business in places where they may not have a physical presence can be taxed in such jurisdictions. The Unified Approach agreed by the Inclusive Framework draws heavily on the Unified Approach released by the OECD Secretariat in October 2019.

Endorsement of the Unified Approach is a significant step, as until now Inclusive Framework members have been considering three competing proposals to address the tax challenges of digitalisation. A Programme of Work agreed in May 2019 has been replaced with a revised Programme of Work under Pillar One, which outlines the remaining technical work and political challenges to deliver a consensus-based solution by the end of 2020, as mandated by the G20. Inclusive Framework members will next meet in July in Berlin, at which time political agreement will be sought on the detailed architecture of this proposal.

The Statement by the Inclusive Framework on BEPS takes note of a proposal to implement Pillar One on a "safe harbour" basis, as proposed in a December 3, 2019 letter from US Treasury Secretary Steven Mnuchin to OECD Secretary-General Angel Gurría. It recognises that many Inclusive Framework members have expressed concerns about the proposed "safe harbour" approach. The Statement also highlights other critical policy issues that must be agreed under Pillar One before a decision can be taken. The "safe harbour" issue is included in the list of remaining work, but a final decision on this issue will be deferred until the architecture of Pillar One has been agreed upon.

The Inclusive Framework also welcomed the significant progress made on the technical design of Pillar Two, which aims to address remaining BEPS issues and ensure that international businesses pay a minimum level of tax. They noted the further work that needs to be done on Pillar Two.

"It is more urgent than ever that countries address the tax challenges arising from digitalisation of the economy, and the only effective way to do that is to continue advancing toward a consensus-based multilateral solution to overhaul the international tax system," said OECD Secretary-General Angel Gurría. "We welcome the Inclusive Framework’s decision to move forward in this arduous undertaking, but we also recognise that there are technical challenges to developing a workable solution as well as critical policy differences that need to be resolved in the coming months."

"The OECD will do everything it can to facilitate consensus, because we are convinced that failure to reach agreement would greatly increase the risk that countries will act unilaterally, with negative consequences on an already fragile global economy," Mr Gurría said.

The Inclusive Framework’s tax work on the digitalisation of the economy is part of wider efforts to restore stability and increase certainty in the international tax system, address possible overlaps with existing rules and mitigate the risks of double taxation.  

The ongoing work will be presented in a new OECD Secretary-General Tax Report during the next meeting of G20 finance ministers and central bank governors in Riyadh, Saudi Arabia, on 22-23 February.

February 1, 2020 in BEPS, OECD | Permalink | Comments (0)

Viet Nam and Palau join the Global Forum on Tax Transparency

Viet Nam and Palau join the international fight against tax evasion by becoming the 159th and 160th member of the Global Forum on Transparency and Exchange of Information for Tax Purposes.

Viet Nam and Palau, like all other Global Forum members, will participate on an equal footing, and are committed to combatting tax evasion through implementing the internationally agreed standards of transparency and exchange of information for tax purposes-both exchange of information on request and automatic exchange of informationMembers of the Global Forum include all G20 countries, all OECD members, all international financial centres and a very large number of developing countries.

The Global Forum is the world’s leading multilateral body mandated to ensure that all jurisdictions adhere to the same high standard of international co-operation in tax matters. This is done through a robust monitoring and peer review process which Viet Nam and Palau will also be subject to. The Global Forum also has an extensive technical assistance programme to provide support to its members to implement the standards and quickly use the tools available to tax administrations to fight cross-border tax evasion.

 

February 1, 2020 in GATCA, OECD | Permalink | Comments (0)

Friday, December 6, 2019

US v OECD on Digital Taxation Pillar 1

US Letter stating US will opt out because discriminatory to US MNEs and go with Safe Harbours Download Secretary mnuchin letter to oecd secretary-general

OECD responds that system may fall apart if US does not join Download Letter-from-OECD-Secretary-General-Angel-Gurria-for-the-attention-of-The-Honorable-Steven-T-Mnuchin-Secretary-of-the-Treasury-United-States

 

December 6, 2019 in OECD | Permalink | Comments (0)

Thursday, April 11, 2019

Georgia, the Kingdom of the Netherlands and Luxembourg deposit instruments of acceptance or ratification for the Multilateral BEPS Convention

The Kingdom of the Netherlands has deposited its instrument of acceptance and Georgia and Luxembourg have deposited their instruments of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (multilateral convention or MLI) with the OECD’s Secretary-General, Angel Gurría, underlining their strong commitments to prevent the abuse of tax treaties and base erosion and profit shifting (BEPS) by multinational enterprises. With its instrument of acceptance, the Kingdom of the Netherlands covers Curaçao and the (European and Caribbean parts of the) Netherlands.

In November 2016, over 100 jurisdictions concluded negotiations on the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting ("Multilateral Instrument" or "MLI")  that will swiftly implement a series of tax treaty measures to update international tax rules and lessen the opportunity for tax avoidance by multinational enterprises. The MLI already covers 87 jurisdictions and entered into force on 1st July 2018. Signatories include jurisdictions from all continents and all levels of development and other jurisdictions are also actively working towards signature.

The MLI 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 MLI modifies the application of thousands of bilateral tax treaties concluded to eliminate double taxation. It also implements agreed minimum standards to counter treaty abuse and to improve dispute resolution mechanisms while providing flexibility to accommodate specific tax treaty policies. 

April 11, 2019 in BEPS, OECD | Permalink | Comments (0)

Tuesday, April 9, 2019

OECD Job opportunities

Adviser - Aggressive Tax Planning, Digital and Harmful Tax Practices

We are looking for an Adviser to contribute to the our work on Aggressive Tax Planning, Digital and Harmful Tax Practices, and to the work of the Forum on Tax Administration (FTA).

Deadline: 23 April 2019
Find out more

Adviser – Forum on Tax Administration: Mutual Agreement Procedures (MAP) and Dispute Prevention

We are looking for an Adviser to support the FTA MAP Forum work and take responsibility for conducting peer reviews. S/he will also support the wider work on tax certainty including the International Compliance Assurance Programme, risk assessment, Country-by-Country Reporting and Joint Audits.

Deadline: 23 April 2019
Find out more

April 9, 2019 in OECD | Permalink | Comments (0)

Sunday, February 24, 2019

OECD Releases Peer Review Reports for Stopping Treaty Abuse and MAPs

Latest releases
Progress continues with the implementation of the BEPS package, as the OECD releases additional peer review reports assessing countries’ efforts to implement the Action 6 and Action 14 minimum standards as agreed under the OECD/G20 BEPS Project. 

February 24, 2019 in BEPS, OECD | Permalink | Comments (0)

OECD Offers Revenue Officials International Tax E-Learning

The OECD’s Global Relation Programme offers tax officials from developing countries the necessary training to tackle today’s most pressing challenges in international taxation. These events are offered free of charge in three formats: face-to-face, blended learning and, soon, in e-learning.

 

The Global Relations Programme is launching the first OECD e-learning project: 13 e-learning courses covering 7 different topics related to international taxation will be open in 2019.

 

E-learning courses will be offered free of charge to government tax officials from all countries through the Knowledge Sharing Platform (KSP). These interactive courses will give participants a solid knowledge base on key topics of international taxation, providing a certificate to those who complete them successfully.

 

LIST OF E-LEARNING COURSES

e-learning icon

Courses

Language

Registration

BEPS Minimum Standards

EN

Click here

BEPS Actions 2, 3, 4 and 12: Hybrids, Interests and CFCs

EN

Click here

Basic concepts of Transfer Pricing

EN/ES Click here

Introduction to Transfer Pricing

EN/FR Click here

 

Tentative list of e-learning topics available by the end of 2019

  • 10 Global Principles: Fighting Tax Crime 
  • Beneficial Ownership
  • BEPS Action 5: Harmful Tax Practices
  • Exchange of Information on Request
  • Global Forum: A Tool to Combat Tax Evasion 
  • Introduction to Tax Treaties
  • Tax & Crime
  • Toolkit for Addressing Difficulties in Accessing Comparables Data for Transfer Pricing Analyses 
  • VAT

 

February 24, 2019 in Education, OECD | Permalink | Comments (0)

Thursday, February 21, 2019

Extension of the comment period for the public consultation document on the possible solutions to the tax challenges of digitalisation

In order to ensure all stakeholders are given the full opportunity to provide feedback on the publication consultation document relating to the possible solutions to the tax challenges of digitalisation, the OECD has extended the comment period to 6 March 2019.
The public consultation meeting remains scheduled for 13-14 March 2019 and the deadline for registration to attend the public consultation remains 1 March 2019.
Access the public
consultation document
 
OECD invites taxpayer input on the eighth batch of dispute resolution peer reviews

The OECD is now gathering input for the Stage 1 peer reviews of Brunei Darussalam, Curaçao, Guernsey, Isle of Man, Jersey, Monaco, San Marino and Serbia, and invites taxpayers to submit input on specific issues relating to access to MAP, clarity and availability of MAP guidance and the timely implementation of MAP agreements for each of these jurisdictions using the taxpayer input questionnaire.

Deadline: 19 March 2019

February 21, 2019 in OECD | Permalink | Comments (0)

Thursday, December 13, 2018

Tax revenues continue increasing as the tax mix shifts further towards corporate and consumption taxes

Tax revenues in advanced economies have continued to increase, with taxes on companies and personal consumption representing an increasing share of total tax revenues, according to new OECD research.

The 2018 edition of the OECD’s annual Revenue Statistics publication shows that the OECD average tax-to-GDP ratio rose slightly in 2017, to 34.2%, compared to 34.0% in 2016. The OECD average is now higher than at any previous point, including its earlier peaks of 33.8% in 2000 and 33.6% in 2007.

An increase in tax-to-GDP levels was seen in 19 of the 34 OECD countries that provided preliminary data for 2017, while tax-to-GDP levels fell in the remaining 15 countries. Tax-to-GDP levels are now higher than their pre-crisis levels in 21 countries, and all but eight (Canada, Estonia, Hungary, Ireland, Lithuania, Norway, Slovenia and Sweden) have experienced an increase in their tax-to-GDP ratio since 2009.

Revenue Statistics 2018 shows that the OECD average tax-to-GDP ratio rose slightly in 2017, to 34.2%, compared to 34.0% in 2016. The OECD average is now higher than at any previous point, including its earlier peaks of 33.8% in 2000 and 33.6% in 2007.

 

Consumption Tax Trends 2018 highlights that value-added tax (VAT) revenues continue to be the largest source of consumption tax revenues in the OECD, and have now reached an all-time high of 6.8% of GDP, representing 20.2% of total tax revenue, on average in 2016.

 

After experiencing an upward trend since the economic crisis, standard VAT rates stabilised at 19.3% on average in 2014 and have remained at this level since. Ten countries now have a standard VAT rate above 22%, against only four in 2008. Two countries (Greece and Luxembourg) increased their standard VAT rate between January 2015 and January 2018, while two countries (Iceland and Israel) reduced their standard VAT rate over this period.

With less scope to raise already relatively high standard VAT rates, countries are increasingly implementing or considering base broadening measures to protect or increase VAT revenues. This includes increasing some reduced VAT rates, limiting or narrowing their scope and curbing VAT exemptions. A growing number of tax authorities have implemented or are considering implementation of measures to tackle the challenges of collecting VAT on the ever-rising volume of digital sales, including sales by offshore vendors, in line with new OECD standards.     


Revenue statistics also contains a Special Feature that measures the convergence of tax levels and tax structures in OECD countries between 1995 and 2016. The Special Feature highlights ongoing convergence across the OECD toward higher tax levels, with greater reliance on corporate income tax (CIT), VAT and social security contributions, and a slight downward shift in personal income taxes.

The latest data confirms this convergence, with CIT, as a share of total taxes, now reaching its highest levels since the global economic and financial crisis, increasing on average from 8.8% in 2015 to 9.0% in 2016. CIT revenues are still lower than their peak in 2007 (11.1% of total revenues), but are now higher than at any point since 2009 (8.7%). Between 2015 and 2016, personal income tax revenues decreased from 24.1% to 23.8% of total tax revenues.

The increase in the average share of CIT was driven by increases in revenues from CIT in 23 countries in 2016, while the fall in personal income tax was seen in 20 countries.

In 2017, the largest increases in the overall tax-to-GDP ratio relative to 2016 were seen in Israel (1.4 percentage points, due to tax reforms which increased revenues from taxes on income) and in the United States (1.3 percentage points; due to the one-off deemed repatriation tax on foreign earnings, which increased revenues from property taxes). Nineteen countries had increases but no other country had an increase of more than one percentage point.

Ten OECD countries decreased their tax-to-GDP ratios in 2016, relative to 2015, with the largest decreases observed in Austria and Belgium. There were no decreases of more than one percentage point.

Detailed Country Notes provide further data on national tax burdens and the composition of the tax mix in OECD countries. To access the report and data, go to http://oe.cd/revenue-statistics.

December 13, 2018 in OECD | Permalink | Comments (0)

Wednesday, December 5, 2018

Latin American Ministers launch regional initiative to combat tax evasion and corruption

Uruguay’s Minister of Economy and Finance Danilo Astori hosted  a discussion with Ministers, high level representatives and senior officials from Latin America on how to strengthen regional efforts to combat tax fraud and corruption. The meeting concluded with the signing of  the  the Punta del Este Declaration in which the Ministers and Deputy Ministers of Uruguay, Argentina, Panama and Paraguay agreed to:

  • Establish a Latin American initiative to maximise the effective use of the information exchanged under the international tax transparency standards to tackle tax evasion, corruption and other financial crimes.
  • Explore further means of cooperation including wider use of the information provided through exchange of tax information channels for other law enforcement purposes as permitted under the multilateral Convention on Mutual Administrative Assistance in Tax Matters and domestic laws, and also effective and real-time access to beneficial ownership information.
  • Establish national action plans to further the cooperation objectives and have representatives report on the progress made at the next plenary meeting of the Global Forum.

At the meeting, hosted by Uruguay in the margins of the 11th Global Forum Plenary, the gathered officials also encouraged other interested jurisdictions to join the regional initiative, with additional signatures anticipated in the near future. 

December 5, 2018 in BEPS, OECD, Tax Compliance | Permalink | Comments (0)

Tuesday, November 27, 2018

Global Forum on Tax Transparency marks a dramatic shift in the fight against tax evasion with the widespread commencement of the automatic exchange of financial information

The Global Forum on Transparency and Exchange of Information for Tax Purposes held its annual meeting in Punta del Este, Uruguay on 20-22 November, bringing together over 200 delegates from more than 100 jurisdictions, international organizations and regional groups to strengthen further the international community’s fight against tax evasion.  

The meeting marked the widespread rollout of automatic exchange of financial account of information. Global Forum members took stock of the tremendous progress made in the implementation of the standard of automatic exchange of information (AEOI) with 4 500 successful bilateral exchanges having taken place under the new AEOI Standard in 2018 by 86 jurisdictions. Each exchange contains detailed information about the financial accounts each jurisdiction’s taxpayers hold abroad. Such widespread exchange was also facilitated by the use of the Common Transmission System managed by the Global Forum. Further details can be found in the 2018 AEOI Implementation Report.

Following its review of the legal frameworks, the Global Forum will move to assess the effectiveness of the AEOI Standard in practice. To this end, members adopted a detailed Terms of Reference for such reviews and a work plan further develop, test and refine its approach to conducting the reviews, which will commence in 2020.

The Global Forum also published a further  22 jurisdiction reviews this year in relation to the exchange of information on request (EOIR), which has only increased in relevance with the move to AEOI and transparency initiatives in relation to base erosion and profit shifting (BEPS).

In other developments at the meeting, Global Forum members commended the technical assistance work carried out to support jurisdictions in implementing the standards effectively. This work has grown enormously, and is a truly combined effort of the Global Forum, donors, other international organizations and regional groups, working together towards a common goal.

The Global Forum delegates also welcomed the Punta de Este Declaration which sets up a Latin American initiative to maximize the potential of the effective use of the information exchanged under the international tax transparency standards to not only tackle tax evasion, but also corruption and other financial crimes. This improved international tax cooperation will help counter practices contributing to all forms of financial crimes and improve direct access to information of common interest to all relevant agencies.

The next plenary meeting to be held in 2019 will mark the 10th anniversary of the Global Forum. This will be a key moment to reflect on the role it has played in the effective implementation of the tax transparency standards across the globe and its future direction.

November 27, 2018 in OECD, Tax Compliance | Permalink | Comments (0)

Thursday, November 22, 2018

OECD invites taxpayer input on seventh batch of Dispute Resolution peer reviews

Improving the tax treaty dispute resolution process is a top priority of the BEPS Project. The Mutual Agreement Procedure (MAP) peer review and monitoring process under Action 14 of the BEPS Action Plan was launched in December 2016 with the peer review process now well underway.

The peer review process is conducted in two stages. Under Stage 1, implementation of the Action 14 minimum standard is evaluated for Inclusive Framework members, according to the schedule of review. Stage 2 focuses on monitoring the follow-up of the recommendations resulting from jurisdictions' Stage 1 report. To date, four rounds of Stage 1 peer review reports covering 29 jurisdictions have been released.

The OECD is now gathering input for the Stage 1 peer reviews of Brazil, Bulgaria, China (People's Republic of), Hong Kong (China), Indonesia, Papua New Guinea, Russian Federation and Saudi Arabia, and invites taxpayers to submit input on specific issues relating to access to MAP, clarity and availability of MAP guidance and the timely implementation of MAP agreements for each of these jurisdictions using the taxpayer input questionnaire. As taxpayers are the main users of the MAP this input is key for the review process and we encourage taxpayers and associations of taxpayers (e.g. business and industry associations) to complete the questionnaire and return it to fta.map@oecd.org (in Word format) by 13 December 2018 at the latest.

For more information on the BEPS Action 14 peer review and monitoring process, visit: www.oecd.org/tax/beps/beps-action-14-peer-review-and-monitoring.htm

November 22, 2018 in BEPS, OECD | Permalink | Comments (0)