International Financial Law Prof Blog

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

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)

Friday, November 16, 2018

OECD releases latest results on preferential regimes and moves to strengthen the level playing field with zero tax jurisdictions

International efforts to curb harmful tax practices and prevent the misuse of preferential tax regimes are having a tangible impact worldwide, according to new data released today by the OECD.

The latest progress report from the Inclusive Framework on BEPS covers the assessment of 53 preferential tax regimes, demonstrating jurisdictions' continuing resolve to ensure that tax breaks are only offered to substantive activities and only if they do not pose risks of harmful competition to others.

The assessment process is part of ongoing implementation of Action 5 under the OECD/G20 Base Erosion and Profit Shifting Project. The assessments are undertaken by the Forum on Harmful Tax Practices (FHTP), comprising of the more than 120 member jurisdictions of the Inclusive Framework. Action 5 revamps the work on harmful tax practices with a focus on improving transparency, including compulsory spontaneous exchange on rulings related to preferential regimes, and on requiring substantial activity for preferential regimes, such as IP regimes. The latest batch of assessments includes:

  • 18 regimes where jurisdictions have delivered on their commitment to make legislative changes to abolish or amend the regime (Andorra, Curaçao, Hong Kong (China), Mauritius, San Marino and Spain).
  • Four new or replacement regimes that have been specifically designed to meet Action 5 standard (Lithuania, Mauritius and San Marino).
  • New commitments to make legislative changes to amend or abolish a further 10 regimes, by Aruba, Australia, Maldives, Mongolia, Montserrat, the Philippines and Saint Lucia.
  • An additional 17 regimes that have been brought into the FHTP review process (Aruba, Brunei Darussalam, Curaçao, Gabon, Greece, Jordan, Kazakhstan, Malaysia, Panama, Paraguay, Saint Kitts and Nevis and the United States).
  • Four other regimes that have been found to be out of scope, not yet operational or were already abolished or without harmful features (Aruba, Kenya, Paraguay).

Having completed this latest set of reviews, the cumulative picture of the Action 5 regime review process is as follows, bringing the total number of regimes reviewed to 246:

Cumulative picture of the Action 5 regime review process

These results indicate the extent of continuing work to end harmful tax practices, and ensures that in the future all preferential regimes require real substance.

Given that all preferential regimes for geographically mobile income must now meet the Substantial Activities Requirements, it is essential to ensure that business activity does not simply relocate to a zero tax jurisdiction in order to avoid the substance requirements. This would tilt the playing field for those that have now changed their preferential regimes to comply with the standard and jeopardise the progress made in Action 5 to date. Against this backdrop, the Inclusive framework has decided to apply the Substantial Activities Requirement for "no or only nominal tax" jurisdictions.

"This new global standard means that mobile business income can no longer be parked in a zero tax jurisdiction without the core business functions having been undertaken by the same business entity, or in the same location," said Pascal Saint Amans, director of the OECD Centre for Tax Policy and Administration. "The Inclusive Framework's actions will ensure that substantial activities must be performed in respect of the same types of mobile business activities, regardless of whether they take place in a preferential regime or in a no or only nominal tax jurisdiction."

The FHTP will next meet in January 2019, to assess continuing reviews on the remaining regimes for which commitments to amend or abolish were made in 2017. Further discussion on all other regimes will take place through the FHTP review process in 2019. The FHTP will also work on the next steps for assessing compliance with the global standard for no or only nominal tax jurisdictions, and continue to report results to the Inclusive Framework.

November 16, 2018 in BEPS, OECD | Permalink | Comments (0)

Friday, October 19, 2018

OECD and IGF release first set of practice notes for developing countries on BEPS risks in mining

For many resource-rich developing countries, mineral resources present a significant economic opportunity to increase government revenue. Tax base erosion and profit shifting (BEPS), combined with gaps in the capabilities of tax authorities in developing countries, threaten this prospect. The OECD’s Centre for Tax Policy and Administration and the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) are collaborating to address some of the challenges developing countries face in raising revenue from their mining sectors. Under this partnership, a series of practice notes and tools are being developed for governments.

Three practice notes have now been finalised. In addition, interested parties were invited to provide comments on prelimary versions of these reports and are now publishing the public comments submitted. The OECD and IGF appreciate all feedback received.

Limiting the Impact of Excessive Interest Deductions on Mining Revenue

Building on BEPS Action 4, this practice note guides government policy-makers on how to strengthen their defences against excessive interest deductions in the mining sector.

Tax Incentives in Mining: Minimising Risks to Revenue

Supplementing wider work undertaken by the Platform for Collaboration on Tax on tax incentives, this practice note focuses on the use of tax incentives in mining specifically, examining the tax base erosion risks they can pose.

Monitoring the Value of Mineral Exports: Policy Options for Governments

Ensuring appropriate pricing of minerals relies on high-quality, accurate testing facilities and controls. This practice note helps governments choose the appropriate policy option for monitoring the value of mineral exports, considering the type of mineral, the risk of undervaluation, existing government capacities, and available budget.


About the OECD/IGF co-operation

The IGF and OECD Centre for Tax Policy and Administration have formed a partnership, combining the IGF’s mining expertise with the OECD’s knowledge of taxation, to design sector specific guidance on some of the most pressing base erosion challenges facing resource-rich developing countries.

This guidance reflects a broad consensus between the OECD Centre for Tax Policy and Administration Secretariat and the IGF, but should not be regarded as the officially endorsed view of either organisation or of their member countries.

Further information on the work of both organisations is available at:

October 19, 2018 in BEPS, OECD | Permalink | Comments (0)

Saturday, October 6, 2018

The OECD Blockchain Primer

What is blockchain? A technology? A currency? The new internet? This primer provides an introduction to blockchain technology, outlines some of the potential benefits it can bring, and considers the risks and challenges it poses. While not comprehensive, it is an overview of the key concepts and terms intended to help people better understand this emerging technology and its growing impact. 

Download OECD-Blockchain-Primer

 
PODCAST The blockchain revolution - Part I

PODCAST The blockchain revolution - Part II

VIDEO Competition and the R3 blockchain consortium

October 6, 2018 in Financial Services, OECD | Permalink | Comments (0)

Wednesday, September 19, 2018

Tax Policy Reforms 2018 OECD and Selected Partner Economies

This third edition covers the latest tax policy reforms in all OECD countries, as well as in Argentina, Indonesia and South Africa. Monitoring tax policy reforms and understanding the context in which they were undertaken is crucial to informing tax policy discussions and to supporting ...

September 19, 2018 in OECD | Permalink | Comments (0)

Thursday, July 26, 2018

Corporate Effective Tax Rates Model Description and Results from 36 OECD and Non-OECD Countries

Variations in the definition of the corporate tax base across countries can have significant impacts on tax liabilities associated with a given investment. An accurate assessment of the effects of corporate tax systems on investment thus needs to build on a consistent methodological framework covering not only statutory tax rates (STRs) but also many provisions affecting the base such as, e.g., fiscal depreciation.

The new OECD model described in this paper provides such a framework; building on the theoretical model developed by Devereux and Griffith (1999, 2003) it presents forward-looking effective tax rates (ETRs) for 36 OECD and Selected Partner Economies taking into account a wide range of corporate tax provisions. Empirical results confirm that corporate tax bases vary considerably across countries and asset categories; since tax bases are typically narrower in countries with higher STRs, ETRs tend to be less dispersed across countries than STRs.

July 26, 2018 in OECD | Permalink | Comments (0)

Wednesday, July 11, 2018

Implementation and enforcement of the OECD Anti-Bribery Convention

Over the past 19 years, monitoring by the OECD Working Group on Bribery has established the Convention as the most rigorously enforced international anti-corruption instrument. New reports on implementation and enforcement have been issued for Germany and Norway.
» Germany
» Norway
» All country reports on implementation

July 11, 2018 in AML, OECD, OFAC | Permalink | Comments (0)

Wednesday, July 4, 2018

OECD releases BEPS discussion draft on the transfer pricing aspects of financial transactions

Public comments are invited on a discussion draft on financial transactions, which deals with follow-up work in relation to Actions 8-10 ("Assure that transfer pricing outcomes are in line with value creation") of the BEPS Action Plan.

The 2015 report on BEPS Actions 8-10 mandated follow-up work on the transfer pricing aspects of financial transactions. Under that mandate, the discussion draft, which does not yet represent a consensus position of the Committee on Fiscal Affairs or its subsidiary bodies, aims to clarify the application of the principles included in the 2017 edition of the OECD Transfer Pricing Guidelines, in particular, the accurate delineation analysis under Chapter I, to financial transactions. The work also addresses specific issues related to the pricing of financial transactions such as treasury function, intra-group loans, cash pooling, hedging, guarantees and captive insurance.

While comments are invited on any aspect of the discussion draft, the document also identifies a number of issues on which feedback is particularly sought.

Interested parties are invited to send their comments on this discussion draft, and to respond to the specific questions included in the boxes, by 7 September 2018 by e-mail to TransferPricing@oecd.org in Word format (in order to facilitate their distribution to government officials). Comments in excess of ten pages should attach an executive summary limited to two pages. Comments should be addressed to the Tax Treaties, Transfer Pricing and Financial Transactions Division, OECD/CTPA.

Please note that all comments received on this discussion draft will be made publicly available. Comments submitted in the name of a collective “grouping” or “coalition”, or by any person submitting comments 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.

For more information, please Tomas Balco, Head of the Transfer Pricing Unit or the Communications Office at the OECD Centre for Tax Policy and Administration.

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

Friday, June 29, 2018

OECD launches largest source of comparable tax revenue data

A new database providing detailed and comparable tax revenue information for 80 countries around the world – and which will expand to cover more than 90 countries by the end of 2018 – was unveiled today during the 5th plenary meeting of the Inclusive Framework on BEPS, held in Lima, Peru.


The Global Revenue Statistics Database provides the largest public source of comparable tax revenue data, which is produced in partnership with countries and regional organisations. The database provides reliable and accessible country-specific indicators on tax levels and structures, supports global efforts to raise domestic revenues for sustainable development, contributing directly to the Sustainable Development Goals and the Addis Ababa Action Agenda. It will strengthen the capacity of governments and tax policy-makers to develop and implement tax policy reforms that will raise domestic resources to fund the provision of vital public goods and services.

“With information covering 80 countries, the Global Revenue Statistics Database sets the global standard for robust and comparable tax revenue data” said Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration. “It is a vital foundation for tax policy reform and in supporting efforts to raise domestic resources to fund development”.

working paper, drawing on the new database, shows that in the 21st century countries have made strong progress towards mobilising domestic financing for development. Levels of tax revenues are now higher and more even across countries than at the turn of the century; and countries with the lowest revenues have experienced the largest increases in their tax-to-GDP ratios.


The Global Revenue Statistics Database integrates information from the four annual Revenue Statistics publications, which provide tailored insights on tax systems and revenue priorities in African, Asian, Latin American and Caribbean (LAC), and OECD countries. Based on the internationally-recognised OECD standard, the publications are produced in partnership with regional partners, with the financial support of the European Union, and in close collaboration with participating countries.


Key findings from the working paper (drawing from the new database):

  • Across the 80 countries, tax-to-GDP ratios range from 10.8% to 45.9%.
    • Half of the countries have a tax-to-GDP ratio ranging between 18.2% and 33.2% of GDP.
    • The median tax-to-GDP ratio is 26.2%.
  • Since 2000, three-quarters of the countries in the database have increased their tax to GDP ratios:
    • Half of the countries have increased their tax-to-GDP ratios by between 0 and 5% of GDP;
    • A further quarter have increased their tax-to-GDP ratio by more than 5% of GDP. Most of these countries are from Africa and LAC.
    • The remaining quarter of countries, where tax-to-GDP ratios fell, are predominantly OECD countries.
  • In Africa (16) and LAC, taxes on goods and services (especially VAT) and corporate income taxes are particularly important as a share of revenues. Social security contributions and personal income taxes form the highest shares of tax revenue in most OECD countries, with VAT playing a smaller role. 
  • Since 2000, VAT has become increasingly significant in more than three-quarters of the countries, in many cases, with corresponding falls in the share of income taxation or taxes on other goods and services. The exceptions are the quarter of countries with the highest increases in their tax to GDP ratios, which recorded strong increases in most or all major tax types.
  • Per capita income, and different types of tax structures, are linked to the level of taxation.
    • There is a positive correlation between tax-to-GDP levels, per-capita income levels and the share of personal income tax and social security contributions.
    • There is a negative correlation between tax-to-GDP levels and the shares of corporate taxes and taxes on goods and services.

To access the database, key findings, technical note, and working paper, visit http://oe.cd/global-rev-stats-database

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

Monday, June 25, 2018

OECD releases new guidance on the application of the approach to hard-to-value intangibles and the transactional profit split method under BEPS Actions 8-10

the OECD released two reports containing Guidance for Tax Administrations on the Application of the Approach to Hard-to-Value Intangibles, under BEPS Action 8; and Revised Guidance on the Application of the Transactional Profit Split Method, under BEPS Action 10.

In October 2015, as part of the final BEPS package, the OECD/G20 published the report on Aligning Transfer Pricing Outcomes with Value Creation (OECD, 2015), under BEPS Actions 8-10. The Report contained revised guidance on key areas, such as transfer pricing issues relating to transactions involving intangibles; contractual arrangements, including the contractual allocation of risks and corresponding profits, which are not supported by the activities actually carried out; the level of return to funding provided by a capital-rich MNE group member, where that return does not correspond to the level of activity undertaken by the funding company; and other high-risk areas. The Report also mandated follow-up work to develop:

The new guidance for tax administration on the application of the approach to hard-to-value intangibles (HTVI) is aimed at reaching a common understanding and practice among tax administrations on how to apply adjustments resulting from the application of this approach. This guidance should improve consistency and reduce the risk of economic double taxation by providing the principles that should underlie the application of the HTVI approach. The guidance also includes a number of examples have been included to clarify the application of the HTVI approach in different scenarios and addresses the interaction between the HTVI approach and the access to the mutual agreement procedure under the applicable tax treaty. This guidance has been formally incorporated into the Transfer Pricing Guidelines as an annex to Chapter VI.

This report contains revised guidance on the profit split method, developed as part of Action 10 of the BEPS Action Plan. This guidance has been formally incorporated into the Transfer Pricing Guidelines, replacing the previous text on the transactional profit split method in Chapter II. The revised guidance retains the basic premise that the profit split method should be applied where it is found to be the most appropriate method to the case at hand, but it significantly expands the guidance available to help determine when that may be the case. It also contains more guidance on how to apply the method, as well as numerous examples.


Addressing base erosion and profit shifting continues to be a key priority of governments around the globe. In 2013, OECD and G20 countries, working together on an equal footing, adopted a 15-point Action Plan to address BEPS. In 2015, the BEPS package of measures was endorsed by G20 Leaders and the OECD. In order to ensure the effective and consistent implementation of the BEPS measures, the Inclusive Framework on BEPS was established in 2016 and now has 116 members. It brings together all interested countries and jurisdictions on an equal footing at the OECD Committee on Fiscal Affairs.

June 25, 2018 in BEPS, OECD | Permalink | Comments (0)

Wednesday, April 25, 2018

OECD and IGF invite comments on a draft practice note that will help developing countries address profit shifting from their mining sectors via excessive interest deductions

 For many resource-rich developing countries, mineral resources present an unparalleled economic opportunity to increase government revenue. Tax base erosion and profit shifting (BEPS), combined with gaps in the capabilities of tax authorities in developing countries, threaten this prospect. One of the avenues for international profit shifting by multinational enterprises is the use of excessive interest deductions.   Download Limiting-excessive-interest-deductions-discussion-draft

Building on BEPS Action 4, this practice note has been prepared by the OECD Centre for Tax Policy and Administration under a programme of co-operation with the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF), to help guide tax officials on how to strengthen their defences against BEPS. It is part of wider efforts to address some of the challenges developing countries are facing in raising revenue from their mining sectors. This work also complements action by the Platform for Collaboration on Tax and others to produce toolkits on top priority tax issues facing developing countries.

Comments on the draft are invited from interested stakeholders by 18 May 2018 and should be sent by email to CTP.BEPS@oecd.org. A version in French will also be released in the coming weeks.

April 25, 2018 in BEPS, OECD | Permalink | Comments (0)

Tuesday, April 24, 2018

OECD addresses the misuse of residence/citizenship by investment schemes

Revelations from the "Daphne Project" on the Maltese residence and citizenship by investment schemes underline the crucial importance of the OECD's work to ensure that the integrity of the OECD/G20 Common Reporting Standard (CRS) is preserved and that any circumvention is detected and addressed.   Download Consultation-document-preventing-abuse-of-residence-by-investment-schemes

Over the last months, the OECD has been taking a set of actions to ensure that all taxpayers maintaining financial assets abroad are effectively reported under the CRS, including by:

  • issuing new model disclosure rules that require lawyers, accountants, financial advisors, banks and other service providers to inform tax authorities of any schemes they put in place for their clients to avoid reporting under the CRS. The adoption of such model mandatory disclosure rules will have a deterrent effect on the promotion of CBI/RBI schemes for circumventing the CRS and provide tax authorities with intelligence on the misuse of such schemes as CRS avoidance arrangements. The EU Member States have already agreed  to implement these rules as part of a wider directive on mandatory disclosures;
  • reaching out to individual jurisdictions, including Malta, to make them aware of the risk of abuse of their CBI/RBI schemes and offer assistance in adopting mitigating measures; and
  • establishing a list of high risk schemes in order to further raise awareness amongst stakeholders of the potential of such schemes to undermine the CRS due diligence and reporting requirements.

Download Public-input-received-misuse-of-residence-by-investment-schemes-to-circumvent-the-common-reporting-standard

In addition, on 19 February 2018, the OECD issued a consultation document, outlining potential situations where the misuse of CBI/RBI schemes poses a high risk to accurate CRS reporting and seeking public input both to obtain evidence on the misuse of CBI/RBI schemes and on effective ways for preventing such abuse.

The substantial amount of input received in response to the consultation further underlines the importance of the OECD's actions in this field. It also contains a wide range of proposals for further addressing the misuse of RBI/CBI schemes, including: 1) comprehensive due diligence checks to be carried out as part of the RBI/CBI application process, 2) the spontaneous exchange of information about individuals that have obtained residence/citizenship through such a CBI/RBI scheme with their original jurisdiction(s) of tax residence; and 3) strengthened CRS due diligence procedures on financial institutions with respect to high risk accounts.

The OECD will take the next step in addressing the issue, when experts from OECD and G20 countries meet in Paris this May to further elaborate actions to be taken to effectively address the misuse of CBI/RBI schemes.

April 24, 2018 in OECD, Tax Compliance | Permalink | Comments (0)