The OECD secretary-general has published his report to the December 2018 meeting of G20 leaders in Buenos Aires, covering international tax developments including the digital economy, and progress on tax transparency.
The report is in two parts:
an update on the OECD’s international tax agenda; and
a progress report on the global forum on transparency and exchange of information for tax purposes.
The international tax agenda report is divided into four themes: BEPS; tax transparency; capacity building; and tax certainty. The main points are summarised below.
On BEPS:
BEPS multilateral instrument expected to result in modification of 1,400 bilateral tax treaties;
first exchanges of CbC reports took place in June;
first edition of corporate tax statistics database to be released in January 2019, with further analysis to follow later in 2019 and 2020;
OECD still hopes for agreement on a long-term solution for taxing the digital economy to be delivered in 2020; and
work is underway on understanding the risks from blockchain technology and crypto-assets.
On tax transparency:
jurisdictions around the world had identified €93bn in additional revenue from voluntary compliance mechanisms and offshore investigations by June 2018;
strengthened criteria for exchange of information on request (EOIR) and automatic exchange of information (AEOI) to be applied in time for G20 meeting in June 2019;
of the 98 jurisdictions committed to automatic exchange, 83 have commenced exchanges, while 15 jurisdictions have not yet done so;
six jurisdictions have been rated either partially- or non-compliant with exchange of information on request; and
three jurisdictions committed to AEOI still need to ratify the multilateral convention for mutual administrative assistance in tax matters.
On capacity building:
the Platform for collaboration on tax agreed a new work plan for 2019/20 in October;
Tax inspectors without borders, having completed 10 projects, with 34 currently operational and 22 in the pipeline, has a target of 100 deployments by 2020.
On tax certainty:
the Report on tax certainty 2018 update, published in July, recognised the need to include developing countries;
the 2017 mutual agreement procedure (MAP) statistics, covering 85 jurisdictions, showed more than 80% of MAPs resolved the issue for transfer pricing cases and more than 75% for other cases. Approximately 65% of transfer pricing MAP cases were resolved with an agreement fully eliminating double taxation and almost 15% were granted a unilateral relief;
for the future, the OECD encourages an integrated approach involving advance pricing agreements, joint audits and the International Assurance Compliance Programme (ICAP), for which the pilot launched in June.
On the challenges posed by digitalisation in the area of taxation, OECD secretary-general Angel Gurría said that while a consensus solution is within reach, ‘the G20 needs to show unity and commitment’ to achieve it. The OECD report on the issue, due at the G20 meeting in June 2019, is expected to provide a basis to find an effective response by the target date of 2020.
The OECD secretary-general has published his report to the December 2018 meeting of G20 leaders in Buenos Aires, covering international tax developments including the digital economy, and progress on tax transparency.
The report is in two parts:
an update on the OECD’s international tax agenda; and
a progress report on the global forum on transparency and exchange of information for tax purposes.
The international tax agenda report is divided into four themes: BEPS; tax transparency; capacity building; and tax certainty. The main points are summarised below.
On BEPS:
BEPS multilateral instrument expected to result in modification of 1,400 bilateral tax treaties;
first exchanges of CbC reports took place in June;
first edition of corporate tax statistics database to be released in January 2019, with further analysis to follow later in 2019 and 2020;
OECD still hopes for agreement on a long-term solution for taxing the digital economy to be delivered in 2020; and
work is underway on understanding the risks from blockchain technology and crypto-assets.
On tax transparency:
jurisdictions around the world had identified €93bn in additional revenue from voluntary compliance mechanisms and offshore investigations by June 2018;
strengthened criteria for exchange of information on request (EOIR) and automatic exchange of information (AEOI) to be applied in time for G20 meeting in June 2019;
of the 98 jurisdictions committed to automatic exchange, 83 have commenced exchanges, while 15 jurisdictions have not yet done so;
six jurisdictions have been rated either partially- or non-compliant with exchange of information on request; and
three jurisdictions committed to AEOI still need to ratify the multilateral convention for mutual administrative assistance in tax matters.
On capacity building:
the Platform for collaboration on tax agreed a new work plan for 2019/20 in October;
Tax inspectors without borders, having completed 10 projects, with 34 currently operational and 22 in the pipeline, has a target of 100 deployments by 2020.
On tax certainty:
the Report on tax certainty 2018 update, published in July, recognised the need to include developing countries;
the 2017 mutual agreement procedure (MAP) statistics, covering 85 jurisdictions, showed more than 80% of MAPs resolved the issue for transfer pricing cases and more than 75% for other cases. Approximately 65% of transfer pricing MAP cases were resolved with an agreement fully eliminating double taxation and almost 15% were granted a unilateral relief;
for the future, the OECD encourages an integrated approach involving advance pricing agreements, joint audits and the International Assurance Compliance Programme (ICAP), for which the pilot launched in June.
On the challenges posed by digitalisation in the area of taxation, OECD secretary-general Angel Gurría said that while a consensus solution is within reach, ‘the G20 needs to show unity and commitment’ to achieve it. The OECD report on the issue, due at the G20 meeting in June 2019, is expected to provide a basis to find an effective response by the target date of 2020.
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