OECD Current Tax Agenda 2012

OECDs Current Tax Agenda
2012
message from the secretary-general of the organisation for economic co-operation and development
Message from the Secretary-General of the Organisation for Economic Co-operation and Development
he OECDs vision is to build a stronger, greener and fairer world economy, an objective that is all the more critical
as the recovery from the worst financial and economic crisis of our lifetimes is still fragile for many countries. In this policy environment it is essential to step up our work on tax policy and administration to support policymakers in their response to the complex and formidable challenges they currently face. The OECDs analytical work in the tax area aims to support governments efforts to restore growth, stimulate employment,
investment and innovation, reduce inequality, achieve fiscal consolidation, address climate change and enhance the competitiveness of their economies. Our international tax policy work contributes to the removal of barriers to international trade and investment. Sound tax policy is of limited value without effective and efficient implementation. Our Forum on Tax Administration, with over 40 Tax Commissioners leading its work, plays a key role in shaping global attitudes towards tax compliance and develops best practices in taxpayer service. Through our Tax and Development programme, we are strengthening the capacity of developing countries to mobilise domestic resources for their development through more effective tax systems. In carrying out all of this work, the Centre for Tax Policy and Administration (CTPA) has been at the forefront of innovative ways of engaging a broad range of jurisdictions in its work: the Global Forum on Transparency and Exchange of Information for Tax Purposes, with over 100 member jurisdictions, is one example and the opening up of the multilateral Convention on Mutual Administrative Assistance in Tax Matters to all countries, is another. The recently launched Oslo Dialogue on tackling tax crimes and illicit flows adds a new dimension by bringing different policy communities together from developed and developing countries to work towards a whole of government approach to tackling tax crimes, corruption, money laundering and other illicit flows. I look forward to further innovations to improve the relevance and impact of our tax work that will be developed under the able leadership of Pascal Saint-Amans, the new Director of the CTPA, and Masatsugu Asakawa, the new Chair of the Committee on Fiscal Affairs. Angel Gurra Secretary-General of the OECD
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Photo credits: all photos are OECD except, cover Sergej Khackimullin Fotolia.com, pp. 40 and 153 ITD, p. 63 French Republic Presidency, Photo unit - C. Alix, p.123 USCIB, p.141 ABI Events, p.145 SAT
table of contents
Table of Contents
Message from the Secretary-General of the OECD The OECD: What Is It? The Committee on Fiscal Affairs The Centre for Tax Policy and Administration
1 4 9 17
Hot Topics
The Role of Tax for Development Tax and Inequality Taxation and Employment Taxation and Green Growth Transfer Pricing Simplification Exchange of Information
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23 35 41 46 53 56
Oslo Dialogue: A Whole of Government Approach to Fighting Financial Crime 71
Core Issues
Tax Conventions Tax Policy Analysis and Statistics Taxation of Multinational Enterprises Consumption Taxes International Tax Co-operation Tax Administration Aggressive Tax Planning Developing a Global Partnership Network on Fiscal Relations across Levels of Governments International Tax Dialogue
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81 87 100 106 111 123 135 143 149 153
CTPA Management Team Want to Know More?
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The OECD: What Is It?
The OECD, which traces its roots to the Marshall Plan, groups 34 member countries committed to democratic government and the market economy. It provides a forum where governments can compare and exchange policy experiences, identify good practices and promote decisions and recommendations to produce better policies for better lives. The OECDs mission is to promote policies that will improve the economic and social well-being of people around the world. It provides a forum in which governments work together to share experiences and seek solutions to common problems. The OECD works with governments to understand what drives economic, social and environmental change. It measures productivity and global flows of trade and investment. It analyses and compares data to predict future trends and sets international standards on a range of issues from the safety of chemicals and nuclear power plants to access to bank information for tax purposes. The OECD also looks at issues that directly affect the lives of ordinary people, like how much they pay in taxes and social security, and how much leisure time they can take. It compares how different countries school systems are readying their young people for modern life, and how different countries pension systems will look after their citizens in old age.
Fast Facts
Established: 1961 Secretariat staff: 2 500 Location: Paris, France Secretary-General: Angel Gurra Membership: 34 countries Publications: 250 new titles/year Budget: EUR 342 million (2011) Official languages: English/French
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the oecd: what is it?
The common thread of OECD work is a shared commitment to market economies backed by democratic institutions and focused on the well-being of all citizens. Along the way, the OECD also makes life harder for the terrorists, tax dodgers, corrupt businessmen and others whose actions undermine a fair and open society.
OECD member countries

(with year of membership )
Australia (1971) Austria (1961) Belgium (1961) Canada (1961) Chile (2010) Czech Republic (1995) Denmark (1961) Estonia (2010) Finland (1969) France (1961) Germany (1961) Greece (1961) Hungary (1996) Iceland (1961) Ireland (1961) Israel (2010) Italy (1961)
Japan (1964) Korea (1996) Luxembourg (1961) Mexico (1994) Netherlands (1961) New Zealand (1973) Norway (1961) Poland (1996) Portugal (1961) Slovak Republic (2000) Slovenia (2010) Spain (1961) Sweden (1961) Switzerland (1961) Turkey (1961) United Kingdom (1961) United States (1961)
Did you know the Russian Federation is advancing in its

membership talks with the OECD?
Did you know Brazil, the Peoples Republic of China,

India, Indonesia and South Africa are Key Partners in the OECDs work?
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How is the OECD organised?

Council Oversight and strategic direction
Representatives of member countries and of the European Commission; decisions taken by consensus
Committees Discussion and implementation

Representatives of member countries and of countries with Observer status work with the OECD Secretariat on speci c issues
Secretariat Analysis and proposals

Secretary-General Deputy Secretaries-General Directorates
Council and Committees

Decision-making power is vested in the OECD Council, which is made up of one representative per member country, plus a representative of the European Commission. The Council meets regularly at the level of permanent representatives to the OECD and decisions are taken by consensus. The Council meets at ministerial level once a year to discuss key issues and set priorities for OECD work. Representatives of the 34 OECD member countries meet in specialised committees to advance ideas and review progress in specific policy areas such as economics, trade, tax, science and technology, employment, education and financial markets. There are almost 300 committees, working groups and expert groups in total. Some 40 000 senior officials from national administrations go to OECD committee meetings each year to request, review and contribute to work undertaken by the OECD Secretariat. Once they return home, they have online access to documents and can exchange information through a special network.
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the oecd: what is it?
OECD Secretariat
The work mandated by the Council is carried out by the OECD Secretariat. The Secretariat in Paris is made up of some 2 500 staff who support the activities of committees, and carry out the work in response to priorities decided by the OECD Council. The staff includes economists, lawyers, scientists and other professionals. Most staff members are based in Paris but some work at OECD centres in other countries. Support for the Committee on Fiscal Affairs is provided by the Centre for Tax Policy and Administration (CTPA). The Secretariat of the Global Forum on Transparency and Exchange of Information for Tax Purposes is based in the CTPA.
Financing
The funding of the OECDs work comes from its member countries. Each countrys annual contribution is based on the weight of its economy. Countries also choose to make additional voluntary contributions to support the work of the Organisation. In addition some programmes open to non-OECD countries are funded through separate contributions by the participating countries. This is the case for instance of the Global Forum on Transparency and Exchange of Information and the Network on Fiscal Relations across Levels of Government.
The OECDs core values

Objective: Our analyses and recommendations are independent and evidence-based. Open: We encourage debate and a shared understanding of critical global issues. Bold: We dare to challenge conventional wisdom starting with our own. Pioneering: We identify and address emerging and long term challenges. Ethical: Our credibility is built on trust, integrity and transparency.
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the committee on fiscal affairs
The Committee on Fiscal Affairs
iven the current state of the global economy, one of the top priorities for the
Committee on Fiscal Affairs during my tenure will be to strengthen our analytical work on domestic tax policy design. We need to provide high quality analysis to enable governments to make the best tax policy choices in reforms aimed at fiscal consolidation, restoring growth and job creation, reducing inequality, addressing climate change, fostering cross border trade and
investment, and spurring innovation. The Committee has a wealth of knowledge and expertise to contribute to these issues and I look forward to expanding our work with other OECD Committees and relevant stakeholders to make progress in these areas. At the same time, we must continue to reduce tax barriers to international trade and investment through further updates of the OECD Model Tax Convention, simplification of the administration of the Transfer Pricing Guidelines, and reinforcing our work on dispute resolution. Improving tax compliance and taxpayer service are also key: it is more important now than ever that taxpayers pay the right amount of tax at the right time and in the right place. Equally important, we will continue to strengthen our engagement with countries beyond the current OECD membership in a variety of ways such as the new Global Forum on Transfer Pricing, our Tax and Development programme, and the Oslo Dialogue on a whole of government approach to tax and crime. Masatsugu Asakawa Chair of the Committee on Fiscal Affairs
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The Committee on Fiscal Affairs work on tax issues has always been an important part of the OECDs overall activities. The Committees work covers a wide range of domestic and international tax issues and results in standards, guidelines and best practices that are implemented throughout the world. The OECD Model Tax Convention has, for example, long been recognised as the basis for the global network of tax treaties, and the OECDs 1995 Transfer Pricing Guidelines are used as the basis for legislation in OECD countries and an increasing number of non-OECD economies (NOEs). Both of these instruments were updated in 2010. The Committee brings together senior tax officials from all OECD member countries and Argentina, China, India, Russia and South Africa, which are regular observers in the Committee. The Committee sets the OECDs work programme in the tax area and provides a forum for exchanging views on tax policy and administrative issues. Its work programme is carried out by groups of national experts: Working Party 1 covers tax treaty issues. Working Party 2 is responsible for tax policy analysis and for statistical work. Working Party 6 covers the taxation of multinational enterprises. Working Party 9 examines consumption taxes. Working Party 10 investigates how member governments can co-operate to minimise the extent of tax evasion and avoidance. The Forum on Harmful Tax Practices takes forward the OECDs work on harmful tax practices. The Forum on Tax Administration works on taxpayer service and compliance issues.
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The Task Force on Tax Crimes and Other Crimes works to improve co-operation between tax and law enforcement agencies to counter all forms of financial crime. The Advisory Group for Co-operation with Non-OECD Economies, acts as a forum to obtain the perspectives of Non-OECD partners in the development of the work of the Committee on Fiscal Affairs as well as the direction and strategic orientations of the Global Relations programme of events. The Joint Meetings of Tax and Environment Experts exchange experience about environmentally related taxes. The Global Forums on Tax Treaties and Transfer Pricing engage non-OECD economies in discussions on these topics. The Treaty Relief and Compliance Enhancement (TRACE) Group takes forward the work on improving procedures for cross-border tax claims. The Informal Task Force on Tax and Development serves as an advisory group to help strengthen the role of tax in fostering development. A number of Working Parties (on company taxes, on the taxation of international bond issues and the issue and negotiation of securities, the taxation of energy and tax avoidance and evasion (3, 4, 5, 7 and 8) were wound up either because their tasks were completed or as a result of a restructuring of the Committees work.
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There are also a number of other tax programmes which are not part of the CFA but have a mutually reinforcing link to the CFAs work: Co-ordinating Body of the Multilateral Convention on Mutual Administrative Assistance in Tax Matters, which monitors the implementation and development of the Convention (e.g. by recommending revisions or amendments to it, furnishing interpretive opinions). It is a self-standing, self-financed body made up of the Parties to the Convention. Global Forum on Transparency and Exchange of Information for Tax Purposes, which oversees the implementation of the international standards on transparency and exchange of information through a rigorous peer review process by its more than 100 member jurisdictions. It is a self-standing, self-financed body with a dedicated Secretariat based in the Centre for Tax Policy and Administration. The Network on Fiscal Relations across Levels of Government provides analysis and statistical underpinnings on the relationship between central and sub-central government. It is a self-financed, multi-disciplinary initiative involving tax, governance and economic policy. The International Tax Dialogue is a collaborative project involving the European Commission, the Inter-American Development Bank, IMF, OECD, World Bank and CIAT to encourage and facilitate dialogue on tax matters among national tax officials, international organisations, regional development banks and other key stakeholders. While most of the work is undertaken by government officials and the OECD Secretariat, there is frequent consultation with representatives of business, trade unions and NGOs, primarily through the Business and
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Industry and Trade Union Advisory Committees to the OECD (BIAC and TUAC) and through roundtables or Global Forum events. Input from business and others is also sought through the publication of consultation drafts on the CTPA website. Tax news alerts are sent out regularly on the latest public consultation documents, reports, press releases and studies. Registration for these alerts is free on the OECD website: www.oecd.org/oecddirect. The Committee co-operates with other international organisations: the International Monetary Fund, the World Bank, the World Trade Organization, the World Customs Organisation, the United Nations and the Financial Action Task Force, as well as regional tax organisations (e.g. CATA, CIAT, CREDAF, IADB, IOTA). Occasional inter-disciplinary meetings are held, involving political figures and academics. The work of the Committee is steered by a Bureau, elected annually. Bureau of the Committee on Fiscal Affairs Officers
Mr. Masatsugu Asakawa, Ministry of Finance (Japan), Chair Ms. Manal Corwin, Department of the Treasury (United States), Vice Chair Mr. Armando Lara Yaffar, Ministry of Finance (Mexico), Vice Chair Mr. Mike Williams, HM Treasury (United Kingdom), Vice Chair
Advisory Board
Mr. Ivar Nordland, Ministry of Taxation (Denmark) Mr. Urs Ursprung, Federal Tax Administration (Switzerland) Mr. Martin Kreienbaum, Federal Ministry of Finance (Germany) Julia Martnez, Ministry of Finance (Spain) Mr. Julio Periera Gandarillas, Tax Commissioner (Chile) Ms Fabrizia Lapecorella, Ministry of Finance (Italy) Mr Edwin Visser, Ministry of Finance (Netherlands)
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Mandate of the Committee on Fiscal Affairs

Approved by the Council in November 2008
Objectives
The overarching objective of the Committee on Fiscal Affairs (hereinafter called The Committee) is to contribute to the shaping of globalisation for the benefit of all through the promotion and development of effective and sound tax policies and guidance that will foster growth and allow governments to provide better services to their citizens. Its work is intended to enable OECD and non-OECD governments to improve the design and operation of their national tax systems, to promote co-operation and co-ordination among them in the area of taxation and to reduce tax barriers to international trade and investment. In light of this objective, the Committee shall: facilitate the negotiation of bilateral tax treaties and the design and administration of related domestic legislation; promote communication between countries and the adoption of appropriate policies to prevent international double taxation and to counteract tax avoidance and evasion; e ncourage the elimination of tax measures which distort international trade and investment flows; promote a climate that encourages mutual assistance between countries and establish procedures whereby potentially conflicting tax policies and administrative practices can be discussed and resolved; support domestic tax policy design through the development of high quality economic analysis of tax policy issues, comparative statistics and comparisons of country experiences in the design of tax systems;
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improve the efficiency and effectiveness of tax administrations, both in terms of taxpayer services and enforcement; s upport the integration of non-OECD economies into the international economy by strengthening policy dialogue with them to increase their awareness of and contribution to the Committees standards, guidelines and best practices.
Methods
In order to achieve these objectives, the Committee will focus its work on delivering outputs of high quality and with high policy impacts and shall regularly assess whether these targets are being met. In particular, the Committee shall: develop standards, guidelines and best practices in areas where international co-ordination is desirable and monitor the practical implementation of them and other recommendations; provide a forum for discussions by senior policymakers and tax administrators, and where appropriate the business community and other parts of civil society, of international and domestic tax policy and administration issues and emerging issues in a global economy which require a response from senior tax policy makers; supply OECD countries with internationally comparable tax statistics and comparisons of the major taxes used throughout the OECD area, and provide strategic analysis of important tax policy and administration issues for use in publications, briefs, and the like;
Co-operation
The Committee shall strengthen policy dialogue with non-OECD economies in order to increase their awareness and use of the
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Committees standards and guidelines and to explore together the identification of good practices. The Committee shall monitor and contribute to relevant activities carried out in other international bodies. In particular, it will continue to participate in the UN Committee of Experts on International Co-operation in Tax Matters and will continue its co-operation with the Financial Action Task Force on issues of mutual interest. It will promote and develop strategic partnerships with regional tax and other international organisations and will continue to develop the International Tax Dialogue. The Committee will monitor and co-ordinate work undertaken by the Organisation in related fields and shall co-operate with relevant OECD bodies. In particular, it will continue to work jointly with other committees carrying out projects having tax policy aspects, in particular with the Economic and Development Review Committee, Economics; in the Environment Policy Committee; in the Employment, Labour and Social Affairs Committee; in the Development Assistance Committee; and in the Working Group on Bribery. The Committee shall continue to co-operate closely with BIAC and other major stakeholders. The mandate of the Committee shall remain in force until 31 December 2013 unless the Council decides otherwise.
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the centre for tax policy and administration
The Centre for Tax Policy and Administration
he
Centre
for
Tax
Policy
and
Administration is recognised worldwide
for bringing key contribution to the international tax debate. It is a great honour and challenge to head the Centre during these challenging economic times which are putting domestic and international tax systems to the test. Whatever efforts are made to reduce public expenditure, tax policies will be solicited to balance budget accounts in almost all OECD countries. My top
priority as the Centres new director is to provide the analytical support for designing effective and efficient tax systems that will help restore growth, create jobs and reduce inequalities. We will also strengthen the rules on transfer pricing and provide better instruments to address base erosion and illegitimate profit shifting and to ensure both the elimination of double taxation and the avoidance of double exemption. The Centres work will be very open to non-OECD countries and inclusive to allow these international tax rules to be applied effectively by developed, emerging and developing countries. Pascal Saint-Amans Director of the Centre for Tax Policy and Administration
The Centre for Tax Policy and Administration (CTPA) is the focal point for the Organisations work on taxation. The Centre provides technical expertise and support to the Committee on Fiscal Affairs and examines all aspects of taxation other than macro-fiscal policy, which is dealt with by the Economic Policy Committee. Its work covers international and domestic tax issues, direct and indirect taxes, tax policy and tax administration. The Centres
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statistical publications provide annual comparisons of tax levels and tax structures in member countries and the Centre is also responsible for the OECD Tax Database, which has a description of the main parameters of each member countrys tax system. The Centre contributes to the work of other committees of the OECD in projects which have a strong tax component. Recent examples include input into work on the use of tax instruments to achieve environmental policy objectives, analysis of the impact of taxation on the functioning of labour markets, the role of tax in fostering domestic resource mobilisation and development, the role of tax in spurring innovation and an examination of the link between taxation and growth.
Working with Non-OECD Economies

The CTPAs work is developed with strong input and co-operation from non-OECD economies. An extensive global programme of dialogue between OECD and non-OECD tax officials through 80 events held annually on the full range of OECD work, bringing together almost 100 non-OECD economies. In addition to the CFA and its subsidiary bodies, the CTPA Secretariat provides the technical support for the Co-ordinating Body of the multilateral Convention on Mutual Administrative Assistance in Tax Matters, the Network on Fiscal Relations Across Levels of Government, the Task Force on Tax and Development and the International Tax Dialogue. The Secretariat of the Global Forum on Transparency and Exchange of Information for Tax Purposes is a self-standing Secretariat based in the CTPA. As such, it is one of the five divisions of the Centre.
Working with Business and Civil Society

The OECD recognises the value of input from business representatives and civil society, and the tax area is no exception.
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the centre for tax policy and administration
Working with business and civil society to further develop the OECDs tax instruments, such as the Model Tax Convention, the Transfer Pricing Guidelines and the VAT/GST Guidelines, ensures that they reflect the realities of todays complex global business environment and contribute to the effective elimination of double taxation. Similarly, getting their views on tax administration issues facilitates the development of practical solutions and greater understanding of the issues faced by taxpayers.
overnments and business continue to face ongoing major challenges. The
continued development of a globalised economy and ongoing impact of the financial crisis on government revenues and fiscal deficits emphasise the importance of pro growth tax policy. As well, the transformational impacts of ICT, movement to a low carbon economy, and the ever increasing influence of the major emerging economies on the global economy make dialogue
evermore important between tax administrations and business as taxpayers to ensure that tax policy effectively reflects the evolving economic landscape. From a fiscal perspective each of these issues has major ramifications. Taken together they pose a real challenge to agree, maintain and develop a tax framework on an international basis which is focused on delivering sustainable growth throughout the global economy. The OECD format for tax has been to date the successful means for promoting economic growth as it relates to tax. Business supports the maintenance of the consensus which has been built around the arms length principle and OECD tax principles as the primary defence against double taxation. BIAC looks to OECD in co-ordination with business to ensure a practicable approach to maintaining clear, practicable tax standards. Chris Lenon Chair of the BIAC Committee on Taxation and Fiscal Affairs
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The CFA and the Secretariat engage in a dialogue with business representatives and civil society in a variety of ways, through: Technical advisory groups or informal consultative groups made up of business and government officials to further the work; Round table discussions on emerging issues; Public consultation meetings on discussion drafts or particular issues; Release for public comment of discussion drafts through the OECD website; Participation in tax seminars, conferences and meetings; Regular participation in meetings of the Tax Committee of the Business and Industry Advisory Council (BIAC) and the Trade Union Advisory Committee to the OECD (TUAC); Solicitation of stakeholder views on particular issues (e.g. transfer pricing aspects of intangibles); An ongoing dialogue on how developing countries can benefit from todays more transparent and co-operative tax environment; Engaging with NGOs, businesses and developing countries through an informal task force to advise the OECD on work in the area of tax and development; Government/business Global Forum meetings on tax treaty and transfer pricing issues.
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HOT TOPICS
Hot Topics
The Role of Tax for Development
Tax and Inequality

Taxation and Employment Taxation and Green
Growth
Transfer Pricing Simplification Exchange of Information

Oslo Dialogue: A Whole of Government Approach to Fighting Financial
Crime
the role of tax for development
The Role of Tax for Development
he African Tax Administration Forum (ATAF) is founded on two important
and complementary principles: Firstly, it has at its core the pursuit of good governance, accountability and state-building as a direct consequence of taxation; and secondly, it exists to boost the administrative and technical capacities of its member states. These two principles together inform what ATAF wants to be: relevant, dynamic and cutting edge, the
central platform for African administrators to articulate and develop African tax priorities, policies and best practices, whilst working towards improving the lives of the people of Africa. Oupa Magashula President of the African Tax Administration Forum
Taxation is key to promoting sustainable growth and poverty reduction. It provides developing countries with a stable and predictable fiscal environment to promote growth and to finance their social and physical infrastructural needs. Combined with economic growth, it reduces long term reliance on aid and ensures good governance by promoting the accountability of governments to their citizens. Much needs to be done by regional and international organisations, including those of developing countries such as the African Tax Administration Forum, to improve administrative capacity, broaden the tax base, and increase tax revenue as a proportion of GDP. Sharing experience is of critical importance and South-South exchanges of solutions are an important dynamic for change, enabling developing countries to strike the right balance between implementing an
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attractive tax regime for investment and growth, and securing the necessary revenues for public spending. At the same time, multilateral and multi-stakeholder co-operation is essential in the fight against tax evasion and ensuring developing
Focus on Domestic Resource Mobilisation in Africa

Domestic revenue in sub-Saharan Africa (SSA) more than quadrupled between 2002 and 2008, fell sharply in 2009, and has recovered strongly to reach a new all time high in 2011. Revenue to GDP ratios have increased in all groupings of countries but most significantly in resource-rich countries helped by the boom in commodity exports and in middle-income countries. As a result of this performance, while over 30% of SSA countries mobilised less than 15% of GDP as public revenue commonly regarded as the minimum to ensure coverage of basic government services in 2002, only 8 countries or 17% still collected less than 15% of GDP in 2011. But in a global perspective, public resource mobilisation in SSA remains weak compared to other regions. Recent assessments of tax effort show that half of SSA countries can, on the basis of their economic potential, further raise the equivalent of 2% to 4% of GDP in revenue. The global economic crisis caused a sharp fall in public revenue in 2009, due to lower commodity prices and lower growth (see chart below). In nominal terms, public revenue declined by USD 110 billion, some 21% over the previous year, to USD 393 billion. This decline occurred mostly in oil exporters. Government revenue has recovered to reach USD 469 billion in 2010 and hit a new high of USD 520 billion in 2011. Government revenue in SSA Africa reached USD 340 billion in 2011 compared to USD 74 billion in 2002. The gross national savings rate increased from an average of 17.1% of GDP in the pre-Monterrey period to a high of 24% in 2006 but has since dropped back to an average of 20% in the past three years. However, increases reflect the performance of resource-rich and middle-income countries, whilst low-income countries have made minimal improvement.
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countries can collect a fair share of taxes. More broadly, tax havens and lack of transparency in reporting of profits and tax payments paid in resource-rich developing countries are linked to problems of corruption, financial crime, money laundering, illicit financial flows and trade, including arms. At the September 2010 Millennium Development Goals (MDG) Summit, the mobilisation of domestic resources was recognised as crucial for achieving the MDGs by 2015. According to the UN, attaining government revenue representing 20% of GDP is one of the conditions necessary for achieving the MDGs.
Domestic Resource Mobilisation in Africa

SubSaharan Africa 400 350 Government Revenues in USD 300 250 200 150 100 50 0 North Africa
2002
2005
2006
2007
2008
2009
2010
2011
Sources: IMF, Regional Economic Outlooks (April 2012); World Economic Database of April 2012
What Needs to be Done to Strengthen Domestic Resources?

1) Increase transparency: to ensure developing countries take opportunities to tackle tax evasion and avoidance, as well as
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effectively collect taxes. These include working towards the implementation of agreed standards on transparency and exchange of information (with links to the Global Forum on Transparency and Exchange of Information for Tax Purposes) 2) Strengthen the capacity of tax administrations: in most developing countries this may require creating an independent revenue service with well-paid officials, free from corruption and political interference. A tax system is only as good as its tax administration and without improvement in these administrations, it is unlikely that developing countries will meet the Monterrey commitments to mobilise domestic financial resources for development. Support is needed in administration and international tax areas, and working with key regional initiatives such as ATAF helps to put the developmental agenda firmly in the hands of developing countries themselves. 3) Phase-in trade liberalisation: before removing tariffs on crossborder trade, governments need to ensure that alternative sources of revenue are already in place. This suggests that as the process of liberalisation continues, there needs to be a phase-in period since all the sources of revenue which could replace tariffs personal or corporate incomes taxes; sales or VAT; taxes on moveable or immoveable property. 4) Broaden the tax base: developing countries need to explore how the tax base can be broadened and how people in the informal sector can be brought within the tax base (see chart p.25). This may require reviewing the taxation of land and buildings; exploring new ways to tax households; re-examining the tax treatment of small and medium-sized enterprises; working to minimise the wasteful impact of tax incentives for investment; or introducing simple environmental taxes. It may also require moving towards a heavier reliance on fees and charges.
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Key Facts on Tax Incentives for Investment:

A ccording to investors, tax incentives are never a top three motivation factor for investment decisions in West and Central Africa (WB 2009). In only 4 of 15 countries in the Latin America and Caribbean region are they regarded as one of the top three concerns (IDB 2010). I n South East Europe investors indicate that rather than encouraging FDI, special tax incentives either were not taken into account or operated to discourage investment provisions were difficult to track, understand or comply with and/or invited corrupt behaviour on the part of tax officials, tending to increase project costs and uncertainty (OECD 2003). I n 1980 no low-income Sub-Saharan African countries had tax free zones, 50% did so by 2005; in 1980 40% offered tax holidays, by 2005 about 80% did so (IMF, 2009). E leven of 15 member states of the Southern African Development Community offer tax holidays to certain types of investors, nine of which offer a full exemption from company tax during the holiday period (Nathan MSI 2004). M orocco is the only MENA country to elaborate a Tax Expenditure Report, which has been integrated into the governments budget process (OECD 2008). D ramatic turnarounds are possible. For example, prior to 2006 Mauritius had an extensive set of tax incentives. A major tax reform was undertaken in 2006 which included the removal of most tax holidays, exemptions and investment tax credits. FDI and CIT revenue experienced strong growth since the reforms. 5) R aise awareness in the donor community : to ensure tax administrations and related revenue and customs institutions in the poorest countries receive adequate support. Currently, these issues directly attract less than 0.1% of Official Development Assistance (see chart p.28). Donors could increase that amount and see aid as a way to kick-start the move towards sustainable tax systems. Even if aid budgets are faltering, such assistance should be seen as an investment in the future of developing countries.
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Estimates of Official Development Assistance Aimed at Supporting Tax Systems 2004-2010*

Tax activities (left scale) 200 180 160 140 USD millions 120 100 80 60 40 20 0 2004 2005 2006 2007 2008 2009 2010 0,00% 0,05% 0,10% 0,15% 0,20% Share in total ODA (right scale) 0,25%
Source: OECD * Does not include IMF
The Role of the Informal Task Force on Tax and Development

The OECD set up an Informal Task Force on Tax and Development in 2010 which is co-chaired by the Netherlands and South Africa. The Task Force brings together developing countries and other key stakeholders, including NGOs, business and other international organisations and serves as an advisory group to advise the CFA and the Development Assistance Committee. The work of the Task Force is organised into four pillars: Statebuilding, Taxation and Aid, Transfer Pricing, Transparency and Exchange of Information, and Transparency in the Reporting by Multinational Enterprises of Financial Data, and is supported by the OECDs Tax and Development Programme.
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Third meeting of the OECDs Informal Task Force on Tax and Development, 9-10 May 2012, Cape Town, South Africa
1) Statebuilding, Taxation and Aid. The aim of this pillar is to strengthen tax systems in developing countries in order to mobilise domestic resources for development, reduce aid dependency and promote accountability and statebuilding. There are several activities currently underway under this pillar. Transparency guidelines for the granting and administration of investment-related tax incentives, applicable to both developed and developing countries are being developed. In the coming months the OECD anticipates offering a new service to developing countries to review their tax and investment policies with a major focus on addressing the governance of tax incentives. With the aim of improving the coherence of international support to developing countries, principles have been developed for international engagement in supporting developing countries on tax matters, targeting international assistance providers; over time these can be used to monitor the performance of the international donor community. Collaborative international partnerships are being built to advance diagnostic tools, indicators and benchmarking
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of progress on tax system development. A Global Report on Tax Morale that measures the attitude of ordinary people in developing countries towards tax and evasion is being completed, providing a bottom up perspective that complements more administrative measures of tax system development (see chart below). Finally, the OECD is examining how to improve the rapid deployment of tax inspectors to help with audits in developing countries on a demand-led basis, with consideration being given to a new Tax Inspectors Without Borders service for developing countries. 2) Transfer Pricing. This pillar aims to address the risk that MNEs may take advantage of existing rules and/or capacity constraints in developing countries to shift taxable profits off-shore. Current activities include supporting developing countries to face the challenges in designing and implementing effective transfer pricing regimes, including guidance, tools and intensive support in Colombia, Ghana, Kenya, Rwanda and Vietnam (see box p.31); Institutional and socio economic factors associated with high tax morale globally*
14,0% 12,0% 10,0% 8,0% 6,0% 4,0% 2,0% 0,0% Support for democracy Age Trust in Government Female Religious Educational Attainment
Source: OECD, based on World Value Survey * % refers to the marginal effect of selected variables
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ensuring that internationally developed approaches and standards are effective for developing countries, and providing assistance to regional organisations (e.g. ATAF) in delivering their programmes on transfer pricing.
Current Tax and Development Programme Transfer Pricing Capacity Development Initiatives
G hana. Transfer pricing support is integrated into, and aligned with, the Ghana/GIZ Good Financial Governance programme. Early results of the project include strengthening and updating Ghanas transfer pricing rules in line with internationally accepted standards; the design and implementation of an administrative framework, including the formation of a team of transfer pricing specialists. Vietnam. A structured needs assessment and skills-building programme, in partnership with the EU, will be launched in 2012. In addition, work has advanced on the design of effective transfer pricing and advance pricing arrangements (APA) rules, and the administrative framework for implementing them. Vietnam has made a specific request for intensive assistance on negotiating and agreeing a large bilateral APA. O ECD is responding to Kenyas request for assistance with a review of its transfer pricing rules and guidance, and a comprehensive training programme for its auditors. Kenya has also requested assistance with outwards secondments and study visits. This work will be conducted in partnership with the World Bank. T he Rwanda Revenue Authority are are piloting a recently developed Transfer Pricing Needs Assessment and Implementation Tool. The results of that assessment will be used as a framework for a comprehensive support programme on transfer pricing to commence in 2012/13. A programme of support with Colombia was launched at meetings in Bogota in 2012. A skills-building workshop was held and a structured needs assessment and on-going skills building programme has been agreed. Colombia has requested a comprehensive skills-building programme for auditors. This programme will be delivered in close co-operation with the EU and World Bank.
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3) Transparency and Exchange of Information. This pillar tackles offshore non-compliance by improving transparency and exchange of information with a focus on supporting the Global Forum on Transparency and Exchange of Information in Tax Matters. Specific support is provided to developing countries to facilitate their participation in the Forums governance and monitoring arrangements as equals, and to prepare for peer reviews of their co-operation and compliance with international transparency standards (currently piloting Ghana and Kenya). Work is also underway with ATAF to develop a practical manual on exchange of information for developing countries. 4) Transparency in the reporting by MNEs of financial data. This pillar aims to improve tax compliance by contributing to the enhancement of transparency in the reporting of financial data by MNEs. Current activities include exploring the potential transparency benefits, particularly for developing countries, from the public registration of statutory accounts by unlisted companies, and monitoring government and business led initiatives to increase transparency in financial reporting by MNEs (including the implementation of the Dodd-Frank Act in the USA and the European Union Transparency Directive). Finally, the Task Force is having a clear impact on international developments including contributions to the OECDs Development Strategy, the Busan Partnership for Effective Development Co-operation and with the G-20.
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Tax and Development Contribution to the Development Working Group of the G-20
In the past year, the Task Force on Tax and Development has made a significant contribution to the development work of the G-20. In the course of 2011, the Tax and Development Secretariat and the Co-Chairs of the Task Force worked on a tax and development report to the G-20 Development Working Group. The full report can be found here (http://www.oecd.org/ dataoecd/54/29/48993634.pdf). The final outcomes and decisions reflect many of the Task Forces recommendations. Some important developments include: A call from the G-20 for Multinational Enterprises to be compliant and transparent in their dealings with poor countries. T he G-20 agreeing to support developing countries in order to counter abusive transfer pricing. (Declaration Para 80). T he G-20 welcomed a report from Bill Gates calling on all G-20 countries to impose legally binding transparency requirements on mining and oil companies as exists now in the United States under the Dodd-Frank Act. A call for improvements in tax and law enforcement co-operation. This is an area of work championed by the OECD to make rapid progress on whole of government approaches to addressing illicit financial flows.
Tax and Development at the Busan Ministerial Meeting on Aid Effectiveness, December 2011
Heads of state, ministers and representatives from developing and developed countriessome 3 000 people in totalattended the 4th High Level Forum on Aid Effectiveness in Busan, Korea. Several discussions and agreements related to the importance of domestic resource mobilisation. The OECD Tax and Development Secretariat supported the African Tax Administration Forum (ATAF) to organise a high level panel to raise the profile of tax and development, including inputs from Dr. Donald Kaberuka, President of the African Development Bank, Mr Nhlanhla Nene, Deputy Minister of
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Finance, South Africa, Mr. Amadou Ba, Director General of Tax, Senegal, and Mr. Angel Gurria, Secretary-General, of the OECD. The OECD organised a second panel on illicit financial flows and the role of development co-operation. The outcome of the Forum was agreement to the Busan Partnership for Effective Development Co-operation. The partnership statement makes clear that aid is only part of the solution to development and highlights that governments own revenues play a greater role in financing for development. The role of the private sector was recognised for mobilising domestic resources. The outcome document includes an agreement to take action to facilitate and lever taxation and domestic resource mobilisation through development co-operation. It also sets out an agreement to refrain from requesting the introduction of performance indicators that are inconsistent with developing countries national development strategies and that all activities, and terms and conditions, related to aid will be made public and transparent. Participants agreed a New Deal on fragile states with the objective of improving and focusing external support including on revenue related goals. Finally, participants agreed to increase efforts to accelerate action to address illicit flows and tax evasion. Tax and Development on the Web www.oecd.org/tax/globalrelations/development
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Tax and Inequality
A rising tide may not now lift all boats, to misquote US President Kennedys original analogy made in 1963 linking economic growth to prosperity for all. Can governments maintain the social cohesion needed for sustainable, long-term growth? Supporting an equitable income distribution remains one of the key goals of fiscal (and tax) policy. The rapid growth of emerging economies in the past decade or so has lifted hundreds of millions of people out of absolute poverty and reduced income disparities across the world as a whole. At the same time, until the financial and economic crisis of 2008, most other economies were expanding too. However, within the OECD and emerging economies not all regions or people benefitted equally from the growth years. On the contrary, the distribution of income tended to become more unequal. Unsurprisingly, particularly since the onset of the crisis, these trends have increased the salience of fairness in political debate in many countries, in terms of both equality of opportunity and of outcomes for household incomes and consumption. While few doubt that fairness is important, interpretations of what is fair differ and may in part reflect historical norms for the distribution of income, which can differ widely between countries (see chart).That said, over the longer term too much inequality may be inimical to growth. Tax policy can play a major role in making the post-tax income distribution less unequal. In addition, tax policy is crucial for raising revenues to finance public expenditure on transfers, health and education that tend to favour low-income households, as well as on growth-enabling infrastructure that can also increase social equity.
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Gini Coefficients: Selected Countries (Decade of 2000)
Source: UNU-WIDER World Income Inequality Database, Version 2.0c, May 2008
Inequality tends to be less pronounced in OECD countries than elsewhere in the world, though in recent decades the distribution of disposable incomes has tended to become more unequal. In the mid1980s the Gini coefficient, whereby 0 is perfectly equal (and the higher the coefficient, the more unequal is a distribution) stood at 0.28 among the working-age population, on average, in OECD countries. By the mid-2000s it had become more unequal, increasing to 0.31. What then are the implications for tax policy? Work by the OECD experts and many others on tax reform and economic growth stress the need to weigh up the extent to which high marginal tax rates on income can act as a disincentive, for instance, for investment in human capital or discourage entrepreneurship, and the fact that progressive taxation of income is one of the main ways for governments to redistribute incomes. For many countries the potential trade-offs between economic growth objectives and equity are particularly critical at present. The effects of taxation on income distribution needs to be seen in the context of the trade-offs between growth and equity, and
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this means looking at the overall effects of any reform on the fiscal regime as a whole, and not just at whether individual taxes are progressive or regressive. This is because the distribution of disposable incomes depends on both taxes and benefits. Raising indirect taxes, for instance, is often regressive where these taxes fall on the consumption of goods and services that make up a larger share of the budgets of poorer than richer households. But the overall impact of a fiscal reform can still be progressive, if these effects are offset by other tax and benefit changes. Income-related benefits, for example, are a much more efficient way of increasing the disposable income of poorer households than reduced rates of VAT. Nor is VAT necessarily bad for redistribution. This is clear in the case of developing countries, where the relatively greater reliance on indirect taxes may make their tax systems more regressive. On the other hand, consumption taxes such as VAT may be the only way to finance (more) strongly progressive spending. However, as some countries lack the administrative capacity to make welfare transfers to households, there may be a case for differentiating VAT rate structures to tax necessities at a lower rate, if at all. Most developed countries already have well-developed tax regimes that raise, on average, tax revenues equivalent to some 35% of GDP. The scale of tax revenues is capable of achieving a significant amount of redistribution. However, it is also capable, if structural tax policies are poorly designed, of becoming detrimental to economic performance. During the 1980s a number of countries became concerned that high marginal tax rates were one of the factors that had contributed to the slowdown in economic growth in many countries in the 1970s. Moreover, high tax rates were encouraging the development of selective tax reliefs, which distorted investment decisions, and extensive (even aggressive) tax planning through the exploitation of loopholes that narrowed the tax base. Reformers decided to adopt
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Top Statutory personal income tax rates on wage income, selcted years
Source: Perry and Steiner, 2011
a broad base- low rate approach instead, which meant pushing down statutory rates of both corporate and personal income taxes, and recovering potentially lost revenue by applying these tax rates to a broader base. The apparent success of such reforms encouraged others to emulate them. Moreover, competitive pressures arising from the effects of liberalising trade and financial flows (notably growing international integration and globalisation) also put downward pressures on tax rates. Top marginal statutory rates of personal tax, in particular, have been cut quite substantially in many cases, from an OECD average of 66.8% in 1981 to 41.7% in 2010. Faced with the challenge of how to restore sustainable public finances and the growth of output and employment following the post-2008 recession, what tax policies should OECD countries pursue now? Can tax policies be devised that will be perceived to be fair and help maintain the social cohesion, while supporting growth too? Where additional tax revenues have to be raised as part of fiscal
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consolidation plans, can this be achieved by broadening tax bases to make more of the income of better-off individuals taxable, or should marginal statutory tax rates be raised too? Simply raising marginal personal income tax rates on high earners will not necessarily bring in much additional revenue, because of effects on work intensity, career decisions, tax avoidance and other behavioural responses. Where tax increases are necessary, the most growth-friendly approach would be to reduce tax-induced distortions that harm growth, including closing loopholes, and to raise more revenues from recurrent taxes on residential property, while setting taxes to reduce environmental damage and correct other externalities. As ever, the devil is in the detail, but there are a number of ways in which such reforms could contribute to social equity. For instance, many tax breaks favour higher income individuals disproportionately. The case for reviewing their effectiveness is clearly compelling. There is also scope to raise taxation of residential property which is relatively lightly taxed in many countries. However, while the better off tend to own the most expensive residential property, there are many middle class owners too, so reform has to be approached cautiously, especially given the bruising many home-owners took from the housing bubble. Nevertheless, out-of-date values for tax purposes often distort the efficiency of property markets (by discouraging individuals from moving home, thus reducing labour mobility) and many existing property taxes tend to be regressive, i.e. take proportionally more of the income of poorer households. Reform and revaluation could make property taxes both fairer and less distortive. Good tax administration also matters. New IT systems in use in revenue administrations increasingly include tools such as sophisticated risk engines to identify potential missing revenues.
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Efforts to curb offshore non-compliance by making the exchange of information among tax authorities more effective have been given a new impetus. Tax evaders, who are often wealthy, have fewer places to hide their money. These initiatives also bolster international efforts by the IMF, OECD, UN and World Bank to help low-income countries to develop more effective tax systems. In short, tax reform can promote more equity while unblocking growth, so that the next rising tide lifts more boats together. Recent international discussions at the ITD global conference held in Delhi on 7-9 December 2011 on the role of taxation in reducing inequalities in income and wealth, suggested that there is still significant scope in many countries for tax reforms and changes that reconcile the need to promote sustainable growth and help reduce excessive inequalities. The work of the OECD in the tax area, alongside that being carried out in other international organisations, will help this potential be realised in practice.
4th ITD Global Conference on Tax and Inequality, 7-9 December 2011, New Delhi, India.
Key Publications Matthews, S. (2011), Trends in Top Incomes and their Tax Policy Implications, OECD Taxation Working Papers, No. 4, OECD Publishing, Paris. doi: 10.1787/5kg3h0v004jf-en OECD (2011), Divided We Stand: Why inequality Keeps Rising, OECD Publishing, Paris.
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Taxation and Employment
How Tax Can Help Tackle the Jobs Crisis

In the wake of the financial and economic crisis, the unemployment rate in the OECD area has risen from 6.1% in 2008 to 8.2% in early 2012. This increase has prompted many countries to consider whether tax reform can help reduce long-term unemployment. At the same time tax policy makers in many countries are also concerned about how to reduce the strong work disincentives that tax systems can often create. So how does tax affect employment? And what reforms can best reduce unemployment and increase labour force participation? Taxes on labour income including social security contributions account for around one half of total tax revenue, on average, in OECD countries. Unsurprisingly, these revenue needs often result in high tax burdens. As shown in the figure on p.42, the average tax wedge between the cost to an employer of hiring someone and the take home pay of that individual varies substantially, but is often above 40%. The marginal tax wedge on additional earnings is generally even higher. Additionally, consumption taxes can add as much as 12 percentage points to the tax wedge on labour, while the interaction of benefit and pension systems with the tax system can lead to even greater effective tax burdens on lower income workers and older workers. These taxes drive a wedge between the total labour costs faced by employers and the real consumption wage received by employees. As a result, they will generally discourage employers from hiring, the unemployed from seeking work, and current employees from working longer and harder. High taxes on labour income can also encourage workers to move into the informal sector, and in some cases even to move countries.
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Average and marginal tax wedges for a single worker earning the average wage, 2010
Source: OECD (2011), Taxing Wages 2011, OECD Publishing. The tax wedge is calculated as follows: (income tax + employee SSC + employer SSC / (gross wage earnings + employer SSC), where SSC = social security contributions.
Reducing these tax burdens is difficult, especially given the need in many countries to reduce budget deficits. This suggests there is little scope for across-the-board reductions. However, there may still be scope for targeted reforms. In particular, targeting the employers and employees that are most responsive to tax changes can produce significant employment gains while keeping revenue losses to a minimum. So what reforms can help? One option is to reduce employer taxes employer social security contributions and payroll taxes thereby lowering the cost of hiring workers. This may be particularly beneficial for countries with both high employer taxes and generous minimum wage levels which risk pricing some low-skilled workers out of the job market. Here, tax cuts can potentially generate sustained reductions in unemployment, even after countries fully recover from the crisis. Such cuts may also work on a temporary basis to boost labour demand at least until the crisis ebbs. Policy makers can get extra impact from these reductions if they target them at businesses that hire new workers, particularly those
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that have been most affected by the crisis such as youth and the long-term unemployed. This way they can help maintain skill levels and prevent joblessness from becoming structural and harder to tackle later on. Indeed, several countries have implemented targeted concessions in response to the crisis, including Finland, France, Hungary, Ireland, Portugal and Turkey. Meanwhile, 14 OECD countries had already targeted employer tax reductions at low-skilled workers. The evidence from such efforts shows that targeted employer tax reductions do increase employment. The trouble with these changes is that they can be administratively complex and can create opportunities for taxpayers to game the system by sacking workers and hiring new ones for instance. Care needs to be taken in correctly designing such initiatives, such as by linking temporary reductions to increases in the total number of employees, as has been done in Korea, or to the total payroll. But the rule of thumb is to keep it simple: the more complex the concession, the less likely businesses are to respond to it. Targeted tax reforms can also provide incentives for the out-of-work to hunt for jobs, and for those already with jobs to work longer and harder. Empirical evidence suggests that low-income workers, older people, and second earners (which generally means women) are likely to be most responsive to such tax changes. Work incentives for low-income earners can be increased in various ways. For example, a tax-free allowance can be introduced or increased, or personal income tax and social security contribution rates and/or thresholds can be altered. However, these reforms can be expensive to implement as they tend to also benefit higher-income earners. Work-contingent tax credits have become an increasingly popular tool to both increase work incentives and alleviate in-work poverty. Indeed, 17 OECD countries now have such measures in place. They can be targeted to restrict revenue losses too. Studies show that these tax credits can be very effective at increasing participation
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of low-income workers, particularly single parents. However, again careful design is needed, as studies also show that the withdrawal of these tax credits up the income scale can reduce the number of hours worked by some middle and higher income earners. As for older workers, many tax systems currently tax earned income more heavily than pension income, discouraging older people from continuing to work once they are eligible for pension payments. To address this problem, policy makers should consider providing agebased rather than pension-specific tax concessions. Social security contributions paid by older workers could also be reduced to match those due on pension income. Countries could go even further and actively encourage older people to keep working by providing workcontingent tax credits targeted at older workers. Some countries, such as Australia and the Netherlands, do this already. For second earners, the basic structure of many tax systems creates greater disincentives to work than for single earners. For example, family-based taxation and dependent spouse tax credits and allowances tend to cause second earners to pay higher average and marginal tax rates than are faced by single individuals (see Figure 2). Under family-based taxation, the second earners income is effectively added on to the main earners income, which can push the second earner higher up the progressive income tax schedule; so even if they are earning low wages, they could be paying the top rate in income tax. While there has been a strong trend towards individual-based taxation in the OECD area over the last 30 years, 11 OECD countries still allow some form of family-based taxation. Moving from familyto individual-based taxation and the removal of dependent spouse allowances can improve second earner work incentives at minimal if any revenue cost. Where abandoning family-based taxation is not feasible, an independent allowance or a work-contingent tax credit for second earners could supplement existing arrangements instead.
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Comparison of the average tax wedges faced by a single individual and a second earner, both earning 67% of the average wage, 2010.
Source: OECD (2011), Taxation and Employment, OECD Tax Policy Studies, No. 21, OECD Publishing, Paris.
Indeed, these options have merit even in countries with individualbased taxation, especially those that target benefits on the basis of family income as this can create disincentives for second earners just like family-based taxation. In the end, governments need tax revenue, and even these targeted tax reforms can exact a cost in terms of foregone revenue. The task for governments is to weigh their immediate revenue needs against the potential employment gains that such tax reforms can bring.
Key Publications OECD (2011), Taxation and Employment, OECD Tax Policy Studies, No. 21, OECD Publishing, Paris. Thomas, A. (2011), How tax can tackle the jobs crisis, OECD Observer, No. 287, Q4. OECD (2011), Employment Outlook, OECD Publishing, Paris.
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Taxation and Green Growth
OECD 50th Anniversary Forum, Green and Growth Go Together panel, 25 May 2011, Angel Gurra, Secreatary-General of the OECD
The Green Growth Strategy was launched at the OECDs May 2011 Ministerial Council Meeting. It provides a practical framework for governments to promote economic growth while simultaneously protecting the environmental assets that are essential to our wellbeing. The Strategy highlights two policy approaches that involve an important role for taxation, and which are especially relevant at a time when many governments face fiscal challenges: rationalisation of government support measures that are potentially environmentally harmful, such as tax expenditures favouring fossil fuels; and use of environmentally related taxes.
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taxation and green growth
The room for policy manoeuvres is increasingly limited, especially in more advanced economies. In the context of fiscal consolidation efforts, effective public spending becomes critical. There are very few quick wins though. And one of them is the reform of fossil fuel subsidies. This can contribute to achieving economic and fiscal objectives, while also tackling environmental problems like climate change.
Angel Gurra, OECD Secretary-General, at press conference releasing the Inventory of Estimated Budgetary Support and Tax Expenditures for Fossil Fuels, 4 October 2011
Fossil Fuel Support

Addressing environmental challenges like climate change does not only involve the development of new policies. A logical first step is to consider whether any existing policies are moving us in the wrong direction. For example, a majority of greenhouse gas emissions are carbon emissions from fossil fuels. How can we expect to move to a low-carbon economy if existing policies are encouraging greater fossil fuel production or use? Based on this understanding, in September 2009, G-20 leaders committed to rationalise and phase out over the medium term inefficient fossil fuel subsidies that encourage wasteful consumption. At a time when many governments are under fiscal stress, rationalisation of inefficient fossil fuel support offers the opportunity for three parallel wins: improved environmental outcomes, by removing policies that encourage environmentally intensive patterns of production and consumption; increased economic efficiency and growth, by eliminating policyinduced misallocation of resources; and fiscal consolidation, by reducing inefficient government spending (including tax expenditures).
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Despite the benefits of reforming fossil fuel support, efforts to implement such reforms have been hampered by a crucial lack of information about the amount and type of support measures in place. The International Energy Agency (IEA) has been producing data on consumer price subsidies for fossil fuels in emerging and developing countries. However, the IEA methodology does not capture support to producers or tax concessions to producers or consumers, which account for much of the support provided by developed countries. To help fill this critical data gap, the OECD has worked with member countries to produce the Inventory of Estimated Budgetary Support and Tax Expenditures for Fossil Fuels. The first edition, covering some 250 measures in 24 OECD countries, was released by the SecretaryGeneral in October 2011. It was also the basis for the OECDs contribution to a report by international organisations to the G-20 Leaders Summit at Cannes in November 2011.
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Secretar y-General,
Angel Gurra, with IEA Executive Director, Maria van der Hoeven, at the press conference launching the OECDs Inventory of Estimated Budgetary Support and Tax Expenditures for Fossil Fuels and new IEA data, 4 October 2011
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The common platform provided by the OECD inventory will encourage countries to become more open in quantifying and reporting on policy measures that affect fossil fuel production or use. It is part of a process that will be broadened and deepened over time. The inventory will be gradually expanded to cover all OECD countries, more measures at the sub-national level in federal countries, and other forms of support. Analysis will also be undertaken on the impacts of phasing out support and in developing practical lessons from country reform efforts. The work on fossil fuel support has been reviewed in the Joint Meetings of Tax and Environment Experts, a working group that brings together officials from finance and environment ministries. Related work in the group is examining the composition of energy use in OECD countries and how countries tax different kinds, sources and uses of energy. The resulting maps will be a powerful tool for assessing the purposes and impacts of energy tax policy. For example, aviation, shipping, agriculture and energy-intensive industries are often subject to lower tax burdens than other sectors. To the extent that energy taxes serve to internalise environmental costs of fuel use, differences in effective tax rates may make emissions reduction more costly than it needs to be. The Joint Meetings are also conducting analysis on whether tax rules relating to company cars and commuting expenses may be implicitly encouraging more environmentally intensive forms of transportation and quantifying the related fiscal losses.
Environmentally Related Taxes

Current levels of pollution and environmental damage often reflect a market failure. Businesses and individuals often do not take environmental impacts into account in their decisions because these impacts are not reflected in market prices. For example, despite the global harm caused by carbon and other greenhouse gas (GHG)
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One of the most powerful and efficient approaches to encourage green innovation is to reform our tax systems. I am not speaking about higher taxes; I am speaking about shifting the composition of taxes: using environmental taxes more to create green incentives, perhaps while cutting taxes on corporate and personal income where it matters most for investment, entrepreneurship, employment and growth.
OECD Secretary General, Angel Gurra, presenting the book Taxation, Innovation and the Environment at the Global Green Growth Conference in Copenhagen, 8 November 2010
emissions, people have little incentive to reduce such emissions as long as there is no cost to them for emitting. Market-based instruments like environmentally related taxes and tradable emission permits work because they incorporate the cost of environmental damage into market prices. Putting a price on emissions creates strong incentives for businesses and households to shift towards cleaner methods of production or transport and to invest in energy saving. These tools are cost-effective because they leave firms and individuals with the flexibility to decide how best to reduce their impact. This enables them to seek optimal solutions instead of having to comply with, for example, specific technology standards set by regulation. Cost-effectiveness is critical when environmental challenges are large, government budgets are strained and economic growth is weak. The government revenues raised through environmental taxes also provide opportunities to reduce other taxes or to help consolidate public budgets. Among the main perceived barriers to greater use of environmental taxes have been concerns about the impacts on low-income families and on the competitiveness of energy-intensive industries. These issues are canvassed in a 2006 book on the Politically Economy of Environmentally Related Taxes, which provides many lessons of continuing relevance.
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It is well understood that innovation the creation and adoption of new technologies provides a means to achieve environmental goals at significantly lower costs. Innovation is also a major driver of economic growth. One of the first major reports under the OECD Green Growth Strategy, Taxation, Innovation and the Environment, explores how well-designed environmentally related taxes provide important incentives to develop and adopt new technologies. Shifting part of the tax burden onto pollution aligns with the logic of business it creates market demand for entrepreneurs to develop and sell new smarter and cleaner technologies, thereby promoting green growth.
Taxes, Tradable Permits and other Policies

To address climate change, some countries are adopting cap-andtrade schemes, generally applied to CO2 emissions from large-scale industrial emitters and electricity generators. Environmental taxes, however, are still needed to ensure incentives for emission reduction in areas where cap-and-trade schemes are more difficult to apply such as transportation, waste and agriculture. Recent OECD work has examined the interaction between environmentally related taxes and tradable permit schemes. It is also reviewing how emission trading transactions are treated for tax purposes for purposes of both VAT and corporate income tax, including implications of cross-border transactions. For a number of reasons, environmentally motivated tax preferences (e.g. tax reductions or exemptions to encourage use of environmentallypreferable products or practices environmental goods) are likely to be less effective than taxes on environmental bads like pollution. Nonetheless, governments often face considerable interest in, and pressure to use, tax preferences. Another line of OECD work is therefore examining the effectiveness of tax concessions in comparison with other environmental policy tools.
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Key Publications Inventory of Estimated Budgetary Support and Tax Expenditures for Fossil Fuels, October 2011 Environmental Taxation A Guide for Policy Makers, September 2011 Taxation, Innovation and the Environment A Policy Brief, September 2011 Towards Green Growth, May 2011 Taxation, Innovation and the Environment, October 2010 Environmentally Related Taxes and Tradable Permit Systems in Practice, June 2008 The Political Economy of Environmentally Related Taxes, June 2006 Taxation and Green Growth on the Web www.oecd.org/env/taxes www.oecd.org/env/policies/database www.oecd.org/G-20/fossilfuelsubsidies www.oecd.org/greengrowth
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transfer pricing simplification
Transfer Pricing Simplification
Transfer pricing issues can be both simple and complex. They area simple in terms of their objective: to ensure that profits are allocated to countries where they arise through the application of the arms length principle, which requires that transactions between related entities should be prices as if they were concluded between unrelated parties. The implementation of this principle has become more complex in part in response to the increasingly complex patterns of modern global business operations. The rapidly globalising economy, together with the growing importance of developing countries in the economy has underscored the observation that transfer pricing rules based on the arms length principle are sometimes difficult to apply and require a commitment of substantial compliance and administrative resources. While much of the complexity relates to the necessity of addressing transfer pricing issues in a complex economy, much can be done to streamline the administration of the transfer pricing system. This is important both for developing and developed countries, in order to permit both taxpayers and tax administrations to focus their resources on the most important matters. The OECDs project on transfer pricing simplication has identified five areas where simplification and streamlining are possible. These are: The revision of existing guidance on safe-harbour provisions applicable to routine types of cases. Safe harbours, particularly when applied to low risk matters and adopted on a bilateral or multilateral basis can save taxpayer compliance costs and tax administration resources. Creation of sample competent authority agreements for use by countries in negotiating bilateral safe harbours. Such agreements have the promise of allowing some classes of more routine cases
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to be taken out of the transfer pricing dispute resolution system, allowing taxpayers and tax administrations to focus their resources on the right matters. Simplification of transfer pricing documentation. Transfer pricing compliance is complicated by the existence of widely varying approaches to documentation in countries around the world. The OECD will work towards more standard policies and rules focused on the information countries need to conduct a transfer pricing risk assessment at the beginning of an audit. Issues related to the charging of group members for head office and regional administrative expense consume time and resources when very little is usually at stake. More standard approaches among countries, possibly leading to a multilateral safe harbour provision for some classes of expenses, would greatly simplify compliance and free resources for addressing issues where more is at stake. Simplifying the APA process. This workstream will focus primarily on accelerating the processing of more routine APA cases, giving taxpayers the opportunity to achieve the certainty offered by a well functioning APA without the need for years of negotiations with two or more taxing authorities. The initial focus will be on identifying areas where bilateral memoranda of understanding can be used to accelerate certain kinds of specified cases. These five areas of work can lead to improvements in the enforcement of transfer pricing rules, shortening case processing times, relieving taxpayers and tax administrations of unnecessary burdens in many cases, and making it possible for developing countries to manage their own transfer pricing exposures in a more efficient manner.
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Key Events Global Forum on Transfer Pricing, March 2013, Paris, France. Global Forum on Transfer Pricing, 26-27 March 2012, Paris, France. Key Publications OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (2010) Report on the Atribution of Permanent Establishment (2010) Transfer Pricing on the Web www.oecd.org/ctp/tp www.oecd/org/ctp/tp/guidelines
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Exchange of Information
4th Meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes, Paris, 25-26 October 2011
The key to international tax co-operation is effective exchange of information and the OECD has been at the forefront of international efforts to promote all forms of information exchange including on request, spontaneous, and automatic--since it first established its Working Party on Tax Avoidance and Evasion in 1971. Since then, a lot has happened to further implementation of exchange of information as an effective tool to combat tax evasion and avoidance. Key developments have been the restructuring and expansion of the Global Forum on Transparency and Exchange of Information for Tax Purposes in 2009 as a self-standing body to carry out indepth peer reviews on transparency and exchange of information on request; the amendment in 2010 of the multilateral Convention on Mutual Administrative Assistance in Tax Matters to bring it up to the
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exchange of information
We welcome the ICGs recommendation that countries develop systems for claiming treaty benefits that allow authorised intermediaries to make claims on behalf of their customers on a pooled basis. This process would significantly reduce the administrative costs for our members in this regard. . . We welcome the Reports recommendations that claims for benefits and reporting should be standardised and be capable of transmission in electronic form. This would create efficiencies and cost-savings for all parties the industry, investors and governments.
Comments by the Investment Management Association on the ICG Report on Possible Improvements to the Procedures for Tax Relief for Cross-Border Investors international standard and to allow all countries to become Parties; the Tax Relief and Compliance Enhancement (TRACE) initiative, which aims to both improve the process by which portfolio investors may claim treaty benefits and enhance countries ability to ensure compliance with tax obligations from the perspective of residence and source countries.
Global Forum on Transparency and Exchange of Information for Tax Purposes

Over the past two years, there has been a sea change in the level of tax co-operation throughout the world. In response to the G20 call at the Summit in Washington, November 2008, there has been a widespread commitment by many jurisdictions worldwide to eliminating obstacles to information exchange in tax matters. The G20 Leaders continue to give this issue very close attention. The Global Forum on Transparency and Exchange of Information for Tax Purposes comprises 108 member jurisdictions plus the European Union and 9 international organisations as observers. It is mandated to ensure that all jurisdictions adhere to the same high standard of international co operation in exchange of information on request in tax matters. The transparency and exchange of information standard
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is set down in the Terms of Reference, agreed by the Global Forum in 2009. The Terms of Reference break down the international standard to 10 essential elements. The Global Forum ensures that high standards are met through a comprehensive, rigorous and robust peer review process conducted by teams of experts, independent assessors and overseen by a 30 member Peer Review Group chaired by Mr. Franois DAubert (France). The work of the Global Forum is guided by an 18 member Steering Group chaired by Mr. Mike Rawstron (Australia). The peer review process covers each of the 10 essential elements examining the legal and regulatory framework of the member jurisdictions (Phase 1 reviews) and the actual implementation of the standard in practice (Phase 2 reviews), and resulting in determinations which cover a wide scope regarding the availability of any relevant information in tax matters (ownership, accounting or bank information), the appropriate power for the administration to
Angel Gurria, OECD Secretary-General, presenting the latest peer reviews during the 4th Meeting of the Global Forum on Transparency and Exchange of Information for Tax Purposes, 25-26 October 2011, Paris, France.
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access the information and the administrations capacity to deliver this information to any partner which requests it. Since March 2010, 70 peer review reports have been completed. The majority of these are Phase 1 reviews. In 2012 the focus will shift to Phase 2 reviews which examine how the standards are applied in practice. During the peer review, each element is assessed leading to a determination whether that element is in place; in place but needing improvements; or not in place. Out of 70 jurisdictions reviewed, 27 jurisdictions were found to have one or more element not in place. Out of the remaining 43 jurisdictions, 33 jurisdicitons had elements which needed improvements. Based on the first 70 peer reviews, 446 recommendations for improvements in the legal and regulatory framework have been made so as to bring it upto the international standard. These recommendations are, broken down in the following manner.
Peer Reviews: Phase 1 recommendations

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To date, the Global Forum has experienced a remarkable level of co-operation as may be seen from the expansion of its membership as well as the willingness of members to act on recommendations made to address deficiencies identified as a result of the peer review process. These commitments have resulted in more than 700 bilateral agreements signed, and many more such agreements continue to be negotiated. Moreover, significant changes to domestic legislation have been undertaken in many jurisdictions to allow for effective information exchange in practice. Some of these improvements are remarkable, as those, for example, of Belgiums, which amended its legislation to allow for the access to bank information in the field of direct taxation, of San Marinos, which reformed its domestic legislation with the regard to the availability of ownership information, or of Barbadoss, which expanded its network of international agreements to underpin information exchange in tax matters. The Global Forum also provides Assessor Training Seminars as well as Regional Training Seminars. These Seminars are educational initiatives through which the Global Forum engages with its stakeholders and contributes to spread awareness of the international standard of transparency and exchange of information. To support the peer review process, the Global Forum Secretariat organises training sessions for officials willing to become assessors, while Regional Seminars aim at ensuring that jurisdictions which are to be reviewed receive adequate preparation so as to extract maximum benefit from the review process. Upcoming events are planned for Africa, the Middle-East and the Caribbean. The next Global Forum meeting will be held in Cape Town, South Africa 25-26 October 2012.
The Global Forum and developing countries membership and compliance with the standard
In the past two years, more and more developing countries have joined the Global Forum, as its works help them counter the erosion of
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their tax bases. Transparency and effective exchange of information almost always have a role to play in addressing the primary factors behind the erosion of domestic tax revenues in developing countries, whether these stem from external or domestic non compliance. Improved transparency makes life more difficult for non-compliers both domestically and externally and thus enhances the integrity and credibility of developing countries tax system. By being compliant with the international standard, developing countries can enhance the efficiency of their tax system. The Global Forums peer review process, in fact, demands transparency. However, as shown in the figure below, transparency is to be understood not just as the exchange of information, but primarily as ensuring the availability of ownership, accounting and bank information as well as the access to this information by the tax authorities. Through the peer review process, then, the Global Forum ensures that a country has the legislative framework in place to gather information for purposes of the efficient and effective collection of its taxes domestically and to enhance transparency and exchange of information with other tax authorities to stop and reduce tax leakage.
Exchange of information to protect taxpayers

exchange
on request with safeguards rights and condentiality.
Availability of information particularly accounting bank and ownership information
INFORMATION MATION
Access to information and powers to obtain it

availability ability
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In a nutshell, the benefits to developing jurisdictions in joining the Global Forum are: First, it ensures participation in a unique forum where all offshore financial centres are present, which considerably facilitates the ability of developing countries to negotiate information exchange agreements. As a member on an equal footing, developing countries can put pressure on any jurisdiction to conclude an EOI instrument. Second, the peer review mechanism is a unique source of expertise on a jurisdictions legal and regulatory framework on transparency for tax purposes. As a Global Forum member a developing country is invited to peer review the other members, but it is also peer reviewed, which could be beneficial in terms of improving the efficiency of your tax system. Third, to help all jurisdictions reach the international standards and improve their legal and regulatory framework, developing countries can benefit from technical assistance offers from experts of the Global
Key Achievements
Since the Global Forum was restructured in 2009: M ore than 700 agreements that provide for the exchange of information in tax matters to the standard have been signed. 91 peer reviews have been launched. 70 peer review reports have been completed and published. 4 46 recommendations have been made for jurisdictions to improve their ability to co-operate in tax matters. 3 7(+) jurisdictions have already introduced or proposed changes to their laws to implement the standard. A platform has been created to coordinate technical assistance to developing countries and 2 pilot projects have already been launched with Ghana and Kenya.
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Forum and from other international organisations liaising with the Global Forum. In this sense, the Global Forum, mandated by the G20, has created a platform to co ordinate technical assistance activities amongst all major international and national developing agencies and has launched two pilot projects with Ghana and Kenya. Moreover, regional seminars are organised throughout the world on a regular basis. Finally, it gives a developing country a voice in the decision making process of the Global Forum as all decisions are taken by consensus.
Multilateral Convention on Mutual Administrative Assistance in Tax Matters

In an environment characterised by increased trade and financial liberalisation, coupled with rapid advances in communication technologies, it has become more difficult for countries to ensure that taxes are fairly assessed and collected.
G20 countries commit to Multilateral Convention on Mutual Administrative Assistance in Tax Matters, former French President Nicolas Sarkozy and the Secretary-General of the OECD Angel Gurria at the G20 summit in Cannes, 3-4 November 2011
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The 1988 Convention on Mutual Administrative Assistance in Tax Matters (the Convention) is a unique multilateral free standing instrument for international co-operation, which has a wide scope covering all taxes. It not only facilitates all forms of exchange of information, but also provides for assistance in the recovery of taxes, which differentiates it from most bilateral tax treaties. It provides for simultaneous tax examinations and participation in tax examinations in other countries. It contains provisions that provide for a high level of confidentiality. The information received under the Convention can also be used for other purposes besides those related to tax co-operation, for example to counter money laundering, provided certain conditions are met. The Convention gives countries flexibility in terms of scope and coverage, because it allows for the possibility of reservations on certain provisions, which can be added or repealed at a later date, namely on the taxes covered by the Convention, on assistance in recovery of taxes and on the service of documents.
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We welcome the commitment made by all of us to sign the Multilateral Convention on Mutual Administrative Assistance in Tax Matters and strongly encourage other jurisdictions to join this Convention.
G-20 Cannes Summit Final Declaration, 4 November 2011
The Convention was jointly established by the Council of Europe and by the OECD. It was originally open for signature by the countries that are members of the Council of Europe or the OECD, but has been amended recently to allow any country to adhere. The Convention was in many ways ahead of its time when it was drafted, and its value to effective tax administration has only recently been recognised. However, as it was drafted before the adoption of the internationally agreed standard on exchange of information, the assistance covered by the Convention was subject to limitations existing in domestic laws. In particular, the Convention did not require the exchange of bank information on request nor did it override any domestic tax interest requirement. The internationally agreed standard on transparency and exchange of information instead provides for full exchange of information on request in all tax matters without regard to a domestic tax interest requirement or bank secrecy for tax purposes. The Convention was amended to respond to the 2009 G20 Summit call for developing a multilateral approach to exchange of information to make it easier for developing countries to benefit from improved co-operation. The amended Convention entered into force on 1 June 2011. At the G20 Summit in Cannes, France in November 2011, all G20 countries participated in a signing ceremony. Thirty-five countries have already signed the Convention/amended Convention and many more countries are in the process of doing so. The Convention may be particularly useful in the audit of transfer pricing issues because it allows for joint audits. Such an approach is beneficial to the tax administrations involved as they will all have a
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Today we have taken a major step forward to improve global tax co operation. The OECD looks forward to continuing to work with the G20 and other countries to maximize the benefits from this powerful multilateral instrument. Tax cooperation and compliance are of crucial importance for all countries and citizens - and not only in times of a tight fiscal and budgetary environment.
OECD Secretary-General Angel Gurra on the occasion of the Cannes G-20 Summit , 3 November 2011. single legal framework under which to carry out the audit (as opposed to relying on separate bilateral treaties) and they will all have the same information available to them at the same time. It is also beneficial to the taxpayer as the taxpayer will only have to produce information once and such a process is more likely to reduce the possibility of double taxation. For more information, see Core Issue on Internatinal Tax Co-operation.
The current signatories to the Convention/amended Convention are: Argentina, Australia, Azerbaijan, Belgium, Brazil, Canada, Costa Rica, Denmark, Finland, France, Georgia, Germany, Greece, Iceland, India, Indonesia, Ireland, Italy, Japan, Korea, Mexico, Moldova, the Netherlands, Norway, Poland, Portugal, Russia, Slovenia, South Africa, Spain, Sweden, Turkey, Ukraine, the United Kingdom and the United States. Other countries are considering signing the convention.
Tax Relief and Compliance Enhancement (TRACE)

Although the vast majority of publicly traded securities is now held through a complex network of domestic and foreign intermediaries, few countries have adapted their withholding tax collection and relief procedures to recognise this multi-tiered holding environment. If systems are based on the implicit assumption that there is a direct relationship between the issuer (or its local paying agent) and the beneficial owner of income, it may be difficult or impossible to
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make an effective claim for treaty relief because of the reality of intermediated financial structures. In addition a substantial part of cross-border portfolio investments are made through collective investment vehicles. Yet until recently, the considerable tax obstacles had discouraged small to mediumsized investors from using this method and there was considerable uncertainty as to the appropriate tax treaty applicable. In 2006, the Committee on Fiscal Affairs (CFA) and the Business and Industry Advisory Committee (BIAC) agreed to work on improving the process by which portfolio investors may claim treaty benefits. An Informal Consultative Group (ICG) made up of government representatives and of experts from the business community was created to look at legal and policy issues, primarily relating to the extent to which either collective investment vehicles or their investors are entitled to treaty benefits, and procedural aspects of claims for reductions in source country withholding tax provided for by treaty when assets are held indirectly, whether through Collective Investment Vehicles (CIVs) or through nominees and custodians. In January 2009 the CFA released for public comment two reports by the ICG. The ICGs report on Possible Improvements to Procedures for Tax Relief for Cross-Border Investors makes a number of recommendations on best practice procedures for making and granting claims for treaty benefits for intermediated structures. The ICGs Report on the Granting of Treaty Benefits with respect to the Income of Collective Investment Vehicles, which discusses technical issues and makes recommendations with respect to the treaty eligibility of collective investment vehicles, was used as a basis for updating the OECD Model Tax Convention in 2010. The objectives of the work on procedures are to develop systems that are as efficient as possible, in order to minimise administrative costs and allocate the costs to the appropriate parties; and to identify
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solutions that do not threaten, and that ideally enhance, countries abilities to ensure proper compliance with tax obligations, from the perspective of both source and residence countries. The ICGs Report recommends that countries develop systems for claiming treaty benefits that allow authorised intermediaries to make claims on behalf of the investors on a pooled basis. One of the major benefits of such a system, variations on which have been adopted by a few countries over the past decade, is that information regarding the beneficial owner of the income is maintained by the intermediary at the bottom of the chain, rather than being passed up the chain of intermediaries. Although a country may be willing to provide benefits on the basis of pooled information, it may want to maintain the ability to confirm that the benefits that have been provided were in fact appropriate. For that reason, and in order to encourage compliance in the residence state, the ICG also recommended that those financial institutions that wish to make use of the pooled treaty claim system be required to report directly to source countries (i.e. not through the chain of intermediaries) investor-specific information regarding the beneficial owners of the income. By agreeing to assume this information reporting obligation as a condition of benefitting from the streamlined claims procedure, financial intermediaries can contribute greatly to the ability of governments to ensure, through their exchange of information practices, that investors tax obligations are met in both source and residence countries on the ever-increasing flows of cross border investment income. In January 2009, the CFA referred further work on the procedural issues to a Pilot Group on Improving Procedures for Tax Relief for CrossBorder Investors (Pilot Group), also made up of government and business representatives. The Pilot Groups mandate was to develop standardised documentation for the implementation of the best practices as recommended in the ICGs Report. To fulfil that mandate,
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the Pilot Group prepared a draft Implementation Package consisting of a self-contained set of all of the agreements and forms that would pass between a source country and the financial intermediaries and investors participating in the system. The draft Implementation Package was released for public comment on 8 February 2010 with a comment period ending on 31 August 2010. Work on these procedural issues is taken forward through the Treaty Relief and Compliance Enhancement (TRACE) Group, which is reviewing the comments on the draft Implementation Package. This group is made up of government delegates and will continue to consult regularly with a standing advisory group of business representatives as it pursues the work. Because the success of the proposed system depends on robust information exchange procedures, a joint group of government and business experts is developing information technology solutions to support the project.
Key Events Global Forum on Transparency and Exchange of Information for Tax Purposes, 25-27 October 2012, Cape Town, South Africa.
Key Publications Global Forum on Transparency and Exchange of Information for Tax Purposes Peer Reviews (2011, 2012, and forthcoming) The Multilateral Convention on Mutual Administrative Assistance in Tax Matters - Amended by the 2010 Protocol (June 2011) Implementing the Tax Transparency Standards: A Handbook for Assessors and Jurisductions (May 2011) Pilot Group Report on Possible Improvements to the Procedures for Tax Relief for Cross Border Investors: Implementation Package (February 2010)
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ICG Report on Possible Improvements to the Procedures for Tax Relief for Cross Border Investors (January 2009)
Exchange of Information on the Web www.oecd.org/tax/eoi Global Forum on Transparency and Exchange of Information: www.oecd.org/tax/transparency and hppt://eoi-tax.org Convention on Mutual Administrative Assistance in Tax Matters: www.oecd.org/ctp/eoi/mutual Tax Relief and Compliance Enhancement www.oecd.org/tax/trace
Did you know that because of the administrative

complexity and cost of claiming treaty relief, many portfolio investors have to pay the full amount of (withholding) tax on their cross-border investments?
Did you know that the TRACE system provides

streamlines treaty claim procedures as well as information reporting to ensure tax compliance?to ensure tax compliance?
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Oslo Dialogue: A Whole of Government Approach to Fighting Financial Crime
oslo dialogue: a whole of government approach to fighting financial crime
Fighting economic crime requires greater transparency and improved efforts to make the most of the capacity of different government agencies to work together
Mr. Roger Schjerva, State Secretary, Ministry of Finance, Norway
Money laundering, corruption, terrorist financing, tax crimes, and other financial crimes can threaten the strategic, political and economic interests of both developed and developing countries. The common factor in these types of crimes is that they all thrive in a climate of secrecy and lax regulation and/or enforcement. Countering these activities therefore requires greater transparency and improved efforts to harness the capacity of different government agencies to work together to deter, detect and prosecute these crimes through a whole of government approach. Issues of financial crime and illicit flows are of concern to all countries, but particularly to developing countries. Illicit financial flows resulting from financial crimes strip resources from developing countries that could finance their longterm development. Moreover, illicit financial flows are linked to organised crime, illicit goods, such as drugs and illegal arms, all of which impact the quality of governance, violent conflict and state fragility in the developing world. It is estimated that more than twothirds of these flows involve tax evasion. In March 2011 the OECD organised a Forum on Tax and Crime hosted by Norway in Oslo to promote a whole of government approach to fighting financial crime in both developed and developing countries. More than 150 delegates from 54 delegations participated in the Oslo Dialogue including representatives from a range of OECD and non-
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OECD governmental agencies, including tax administrations, finance and justice ministries, development and assistance ministries, financial intelligence units, central banks, FATF, international organisations, as well as business and NGOs. A second Forum is being hosted by Italy in Rome in June 2012 to review progress and development in these areas. The Oslo Dialogue identified the following key priorities for further work: Improving inter-agency co-operation by mapping out different models of co-operation, their advantages and challenges with a view to developing best practice standards, and with a particular focus on the contribution that tax administrations can make in this regard. Improving understanding and use of international co-operation mechanisms by cataloguing all relevant forms and instruments for international co-operation in fighting financial crime. Supporting sustainable development and fiscal transparency by seeking to assess areas of biggest benefit to developing countries from the whole of government approach. The links between tax crimes and other financial crimes are well recognised. Tax crimes are predicate offences for money laundering in many countries and this is now recognised as an international standard by the Financial Action Task Force (FATF). In a 2009 Recommendation on Tax Measures for Further Combating Bribery of Foreign Public Officials in International Business Transactions and 2010 Recommendation to Facilitate Co-operation between Tax Authorities and Other Law Enforcement Authorities to Combat Serious Crimes, the OECD has advocated greater cooperation and better information sharing between different government agencies involved in the fight against financial crimes both domestically and internationally.
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Tax as a Means to Fight Corruption

Countries have put in place and are reinforcing a range of tax related measures to strengthen both the legal framework and the practical administrative efforts to counter corruption. The combined effect of these measures is increased deterrence, detection and prosecution of corrupt activities. On the policy side, countries have explicitly prohibited tax deductions for bribes to foreign public officials as required by the OECD 2009 Recommendation. Such legislation increases the overall awareness within the business community of the illegality of bribing public officials and increases the cost of doing so. Explicit legislation also raises awareness within tax administrations and highlights the need for tax examiners to seek to detect during audits deductions for payments of bribes and to report suspicious payments to the appropriate domestic law enforcement authorities for possible prosecution of bribery. Policymakers have recognised that sharing of such tax information with domestic law enforcement authorities can improve the detection and prosecution of serious crimes like corruption. On the international side, more and more tax treaties allow the use of information provided by a treaty partner for tax purposes to be used to combat serious crimes such as corruption if certain conditions are met. Tax administrations are now stepping up their training of tax examiners to identify the types of payments that constitute bribes and the action to take when they suspect a bribe has been paid. Such training is usually based on the OECD Bribery Awareness Handbook for Tax Examiners. It includes practical tips such as indicators of bribery, interviewing techniques and examples of bribes identified in tax audits as well as the new OECD Recommendation on Tax
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Measures for Further Combating Bribery of Foreign Public Officials in International Business Transactions.
Tax Crime and Money Laundering

In a recent international survey, anti-money laundering experts identified tax crime as one of the top three sources of dirty money that criminals seek to hide in the financial system. Tax administrations can therefore play an important role in detecting and deterring money laundering, and at the same time tackle tax crimes.
There are substantial similarities between the techniques used to launder the proceeds of crimes and to commit tax crimes. In May 1998 the G-7 Finance Ministers encouraged international action to enhance the capacity of anti-money laundering systems to deal effectively with tax related crimes. The G-7 considered that international action in this area would strengthen existing anti-money laundering systems and increase the effectiveness of tax information exchange arrangements. In February 2012, G-20 Finance Ministers called on the
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OECD, together with the FATF, to report on steps taken to prevent the misuse of corporate vehicles and improve interagency cooperation in the fight against illicit activities. The OECDs Committee on Fiscal Affairs, working with FATF, has developed some new tools to help improve co-operation between tax and anti-money laundering authorities. In the majority of countries tax crime is a predicate offence for money laundering and the number is likely to increase as countries implement the revised FATF Recommendations. In the last 20 years, crime fighters have sought to deter criminals by paying more attention to the confiscation of proceeds of crime. More recently, with the introduction of unusual or suspicious transaction reporting by the regulated sector, it is often the flow of money or goods that is investigated even before a criminal offence has been detected. If criminals are arrested or taxed on the proceeds of crime, they will try to avoid having the proceeds traced back to their origin and avoid their confiscation. In order to be able to spend money openly, criminals will seek to ensure that there is no direct link between the proceeds of crime and the actual illegal activities. They may also seek to construct a plausible explanation for the origin of the money, and thus seek to launder their proceeds of crime before spending or investing it in the legal economy.
Handbook on Money Laundering Awareness

Tax administration staff needs to be aware of the nature of money laundering and how they may recognise indicators of money laundering that need further investigation. The OECD has produced the Handbook on Money Laundering Awareness, which provides guidance in identifying money laundering during the conduct of normal tax audits. It describes the nature of money laundering activities so that tax examiners and auditors can better understand how their contribution can assist criminal investigators in countering
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money laundering. Tax administrations are able to adapt the handbook to suit their particular circumstances taking account of the varying roles that tax administrations have in relation to reporting unusual or suspicious transactions, receiving suspicious transaction reports and investigating money laundering offences. The handbook can help tax administrations and law enforcement authorities to: identify tax crimes identify other crimes and criminals locate and confiscate criminal assets
Money Laundering Methods

The traditional methods of money laundering have centred on the use of cash based businesses and this remains an important area. However criminals will continue to seek out innovative methods to exploit weaknesses in financial systems and to try to keep ahead of the investigators. Real estate, loans and trade based money laundering are preferred methods for criminals to launder the proceeds of crime and tax fraud. The handbook contains graphic examples of these methods and describes the traces of crime that are used to detect them. The tax auditors skills in detecting tax irregularities are well suited to spotting money laundering techniques. The handbook covers indicators that can help detect the methods used in transactions involving: real estate cash businesses international trade loans professional service providers (lawyers, accountants and others)
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International Seminars
To help tax administrations implement their awareness programmes, the OECD has developed a train the trainers programme which is being offered in a number of centres around the globe for all tax administrations. The seminar also covers bribery awareness for tax auditors. Fifty seven participants from twenty two countries attended the first in Washington DC, USA in June 2010 and further events have been held in Southern Africa in association with the Southern African Development Community and at the Multilateral training centre in Ankara for countries from Eurasia and the MENA regions. Further events are planned for the Latin America and Asia Pacific regions.
Key Publications 2009 Recommendation on Tax Measures for Further Combating Bribery of Foreign Public Officials in International Business Transactions. 2010 Recommendation to Facilitate Co-operation between Tax Authorities and Other Law Enforcement Authorities to Combat Serious Crimes. H andbook on Money Laundering Awareness (October 2009), www.oecd.org/ctp/taxcrimes/laundering, available in ten languages. Bribery Awareness Handbook (December 2009), http://www.oecd. org/ctp/nobribes, available in 18 languages. Money Laundering through the Football Sector, FATF (July 2009) Report on Abuse of Charities for Money Laundering and Tax Evasion (February 2009) Access for Tax Authorities to Information Gathered by Anti-money Laundering Authorities (2008)
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Report on Real Estate Sector: Tax Evasion and Money Laundering Vulnerabilities (2007) Report on Identity Fraud: Tax Evasion and Money Laundering Vulnerabilities (2007) Tax and Crime on the Web www.oecd.org/ctp/taxcrimes
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ISSUES
Core Issues
Tax Conventions Tax Policy Analysis and Statistics Taxation of Multinational Enterprises Consumption Taxes International Tax Co-operation Tax Administration Aggressive Tax Planning Developing a Global Partnership Network on Fiscal Relations across Levels of Governments International Tax Dialogue
CORE
tax conventions: removing barriers to trade and investment
Tax Conventions: Removing Barriers to Trade and Investment
Cross-border investment would be seriously impeded if there was a danger that the returns on such investment would be taxed twice, both where the money was invested and in the country of residence of the investors. The OECD Model Tax Convention and the worldwide network of tax treaties based upon it help to avoid that danger by providing clear consensus-based rules for taxing income and capital. For most types of income, especially business profits and investment income, double taxation is avoided in treaties based on the OECD Model Tax Convention by allocating taxing rights between the residence and source countries and by requiring the former to eliminate double taxation where there are competing taxing rights. Most bilateral tax treaties follow both the principles and the
The panel discusses recent international tax development at the Annual OECD Tax Treaty Meeting in Paris, France. Left to right: Silke Bruns of Germany, Douglas Rankin of the United Kingdom, Andrew Dawson of the United Kingdom and Chair of WP1, and Jacques Sasseville of the OECD.
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detailed provisions of the OECD Model. Close to 400 treaties between OECD member countries and over 3 000 worldwide are based on the Model, and it has had considerable influence on the bilateral treaties between non-OECD countries. To facilitate the role of the OECD Model as a standard to prevent double taxation in treaties where non-OECD countries are involved the OECD engages in an inclusive dialogue with non-OECD countries to discuss developments in the Model and issues related to the negotiation, application and interpretation of bilateral treaties. The OECD Model requires constant review to reflect new views and recent developments, resulting in regular changes to the Model. The most recent update to the Model was published in July 2010 and the next update is scheduled for 2014. Working Party 1 on Tax Conventions and Related Questions carries out the technical work on the Model. A number of issues currently under examination could result in further changes to the Model and the Commentary thereon. Some of these issues are described below.
Clarifying the Permanent Establishment Concept (Article 5)

Tax treaties provide that, as a general rule, the business profits of a foreign enterprise are only taxable in a country to the extent that these profits are attributable to a permanent establishment that the enterprise has in that country. Determining whether an enterprise has a permanent establishment in a country is therefore crucial for the allocation of taxing rights on business profits. Over the last 10 years, the Commentary on Article 5 of the OECD Model Tax Convention was updated a number of times to deal with issues related to the interpretation of the permanent establishment concept.
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In October 2011, the OECD released proposals for new Commentary to address further issues of interpretation, such as the issue of when premises are at the disposal of an enterprise. Working Party 1 is now re-examining these proposals in light of the public comments that were received on the proposed Commentary changes.
Beneficial Owner (Articles 10, 11 and 12)

The Articles of the Model Tax Convention relating to dividends (Article 10), interest (Article 11) and royalties (Article 12) impose limits on the tax chargeable by a source State on those items of income derived by a resident of the other State where that person is the beneficial owner of the income in question. Issues of interpretation have arisen with respect to the meaning of the beneficial owner concept under those Articles. In April 2011, the OECD released a discussion draft that included proposed Commentary changes intended to clarify that meaning. The comments received on that discussion draft were discussed at the September 2011 and February 2012 meetings of Working Party 1; a revised discussion draft should be released before the end of 2012.
Tax Treaty Issues Related to the Trading of Emissions Permits

The effort to limit emissions related to global warming has led to an increased use and interest in emissions trading programmes as a mechanism to achieve reductions in emissions of carbon dioxide and other greenhouse gases in an economically efficient manner. These emissions trading programmes present both domestic and international tax issues, including tax treaty issues. See Hot Topic on Green Growth and Climate Change. Working Party 1 is currently examining these tax treaty issues. A discussion draft that reflects a preliminary analysis of the extent to
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which different Articles of the Model Tax Convention could apply to profits or gains arising from such trading was released in May 2011. The comments received on that discussion draft were discussed at the February 2012 meeting of Working Party 1 and another discussion draft reflecting the conclusions of the Working Party should be released before the end of 2012.
Mutual Agreement Procedure (Article 25)

As global trade and investment increase, the possibility of crossborder tax disputes increases as well. Left unresolved, these disputes can result in double taxation and a corresponding impediment to the free flow of goods, services, technology and capital in a global economy. Both governments and business need effective procedures to keep such disputes to a minimum and to resolve them satisfactorily when they arise. Work was undertaken several years ago to examine ways of improving the effectiveness of the Mutual Agreement Procedure (MAP) under Article 25 of the Model Tax Convention. Two important results of that work were included in the 2008 update to the Model. First, a provision requiring mandatory, binding arbitration to settle issues that remain unresolved after two years of MAP consideration was added to Article 25. Countries can enhance the effectiveness of the existing MAP process by including this arbitration procedure in their bilateral tax treaties. Second, changes were made to the Commentary on Article 25 to provide guidance on the proper application of that provision, to promote consistency and to improve its operation. In addition, the Manual on Effective Mutual Agreement Procedures (MEMAP) was developed as an online resource to explain the MAP process and to describe best practices for an effective MAP (www. oecd.org/ctp/memap). Statistics on the number of MAP cases in OECD countries help the OECD monitor the effectiveness of these measures.
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Number of MAP cases in OECD countries is increasing and so is the time required to complete them.
Number of MAP cases open at the end of the year
3400 3200 3000 2800 2600 2400 2200 2000 30 28 26 24 22 20 2006 2007 2008 2009 2010 18 2006 2007 2008 2009 2010
Number of monthe to complete MAP cases
In January 2012, the OECD held a Roundtable on tax disputes, at which representatives from government, the private sector, international organisations and academia examined the prevention and resolution of such disputes from both domestic and bilateral perspectives. The Roundtable identified a number of possible areas of improvement to the MAP on which future work could be undertaken by the OECD.
Emerging Challenges
The leading role of the OECD in the area of tax treaties requires it to keep abreast of developments which might affect treaties in the long term. Some of the questions that are being examined in this context include: How do tax and non-tax treaties interact? How to better take into account non-OECD countries views in the development of the OECD Model Tax Convention? How to better take into account practical implementation when developing new policy? How to improve the resolution of tax treaty disputes?
Model Tax Convention on Income and Capital

The OECD Model Tax Convention on Income and on Capital is the benchmark for negotiating, implementing and interpreting tax conventions. First published in 1963, its influence has gradually extended well beyond OECD countries.
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Key Events 17th OECD Annual Tax Treaty Meeting, 12-13 September 2012, Paris, France Key Publications Model Tax Convention on Income and on Capital 2010, July 2010, ISBN: 978-92-64-08948-8 Discussion draft on the definition of permanent establishment in the OECD Model Tax Convention, October 2011 Discussion draft on the tax treaty issues related to the trading of emissions permits, May 2011 Discussion draft on the meaning of beneficial owner in the OECD Model Tax Convention, April 2011 Tax Treaties on the Web www.oecd.org/ctp/tt Model Tax Convention http://www.oecd.org/ctp/tt/mtc Manual on Effective Mutual Agreement Procedures www.oecd.org/ctp/memap
Did you know that the 2010 OECD Model Tax Convention
includes comments from 65 jurisdictions 34 OECD members and 31 non-members?
Did you know that government officials from around 100

countries and international organisations discuss tax treaty issues at the OECD Annual Tax Treaty Meeting, held each year since 1995?
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tax policy analysis and statistics
Tax Policy Analysis and Statistics

Tax Policy Analysis
The past two decades have been characterised by on-going tax reforms, with governments restructuring their tax systems to achieve their social and economic objectives and, at the same time, secure the revenues required to finance their expenditures. The OECD helps countries in this process by undertaking tax policy analysis from an international comparative perspective, and thereby assisting policy makers in designing tax policies that are suited to their objectives. The OECDs work in this area uses a combination of economic theory and evidence, both statistical and case study materials, to provide an account of likely intended and unintended effects of alternative tax policies. These effects are evaluated in terms of their impact on economic efficiency, income distribution, economic growth and other policy objectives.
Stephen Matthews speaking at the Brussels Tax Forum, Tax Policies for a Post-Crisis World, 1-2 March 2010
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The aftermath of the financial crisis and recession for budget deficits and public debt means that many OECD countries are likely to have to make discretionary increases in taxation as the recovery strengthens to maintain sound public finances. Analysis and discussion of the economic and distributional effects of the balance of taxation between different taxes and the respective merits of raising revenues by broadening tax bases and raising rates will be at the heart of the work programme of the Working Party on Tax Policy and Statistics in coming years.
Stephen Matthews, Head of Tax Policy and Statistics Division, Centre for Tax Policy and Administration
Taxation and Economic Growth

Much of the OECD tax work involves working across a number of areas where tax is an important issue. A good example is Taxation and Economic Growth a project which investigated the design of tax structures to promote economic growth. Corporate taxes were found to be most harmful for growth, followed by personal income taxes, and then consumption and environmental taxes. Recurrent taxes on immovable property appear to have the least adverse impact on growth. In the wake of the recent financial and economic crisis, many countries face the challenge of restoring public finances. So how can countries best raise taxes without jeopardising economic growth? A growth-oriented tax reform would reduce distortions in current tax regimes and to raise additional revenues from the taxes that do the least damage to prospects of economic growth as consumption and environmental taxes and recurrent taxes on immovable property. Meanwhile, it must be recognised that practical tax reform must achieve a balance between efficiency, equity, simplicity and revenue concerns.
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Fair taxation is essential for repairing public finances and building a stronger post-crisis economy. TUAC welcomes the OECDs ground-breaking work and urges it to drive this agenda forward so as to deliver tax systems that put working people first, promote green jobs, clamp down on tax evasion and international tax arbitrage, and strengthen the tax base of developing countries.
John Evans, General-Secretary, TUAC
Policies to enhance employment are key to the recovery from the financial and economic crisis and to long-term economic growth. In October 2011, the OECD released Taxation and Employment, a study which suggests that well-targeted tax reforms can encourage employers to hire more people and the jobless to look for employment. For more information, see the Hot Topic: Taxation and Employment.
Taxation and the Environment

The OECDs Green Growth Strategy is helping countries foster economic growth while preserving the environmental assets on which our well-being depends. Environmentally related taxes have a key role to play. They put a price on pollution, using market signals to encourage businesses and consumers to adopt more environmentally-friendly practices. One of the first publications of the Green Growth Strategy was Taxation, Innovation and the Environment. Through case studies of country experience, it shows how well-designed environmentally related taxes encourage green innovation. The OECD has also examined the appropriate role of environmentally related taxes when a regime of tradable emission permits is in place and is reviewing how emission trading transactions are treated for tax purposes. It is
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also assessing the effectiveness of environmentally motivated tax preferences in comparison with other policy instruments. There is an increasing recognition that certain tax policies can be harmful to the environment. The OECD, with other international organisations, has been actively supporting the G-20 commitment to rationalise inefficient fossil fuel subsidies. The organisation has been working with countries to provide more transparency with respect to existing measures, including tax expenditures, and to assist with reform. In October 2011, the OECD released the first Inventory of Estimated Budgetary Support and Tax Expenditures for Fossil Fuels, which fills an important information gap. Related work is examining how countries tax different kinds, sources and uses of energy and whether tax rules relating to company cars and commuting expenses may be implicitly encouraging more environmentally intensive forms of transportation. For more information, see Hot Topic: Green Growth and Climate Change.
Taxation and Investment in Intellectual Assets and Skills

Investment in intellectual assets and in human capital are widely recognised to be critical for the future growth of output and employment. The OECD is undertaking two multidisciplinary, multi-stakeholder projects, one to develop a Skills Strategy and the other on Intellectual Assets: New Sources of Growth. Both have significant tax policy dimensions. The key drivers of innovation and investment in Knowledge Based Capital that are affected by the tax system have been identified, along with the main tax policy considerations that might have an impact on R&D spending and innovative activities, the dissemination of knowledge, tax planning with the use of intangible assets, as well as the conceptual frameworks that can be applied to build tax indicators and assess the effectiveness of government actions.
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In the case of investment in human capital taxation potentially affects the incentives for individuals to undertake tertiary education (and the choice of course), to develop skills through (re)training after formal education and then to make full and effective use of their human capital in the jobs market.
Taxation and the Distribution of Income

Governments recognise that the tax system has an important role to play in reducing inequalities in the distribution of income and wealth. In a number of OECD countries, top incomes have grown much faster in the past couple of decades than incomes at lower percentile points in the distribution. The OECD report Divided We Stand: Why Inequality Keeps Rising, published in December 2011, includes a chapter on trends in top incomes and the potential implications for tax policy. For more information, see Hot Topic: Tax and Inequality.
Tax Statistics
To support analytical work and inform both governments and the wider public, CTPA collects a wide range of information on tax revenues and tax systems in its member countries. The work on tax statistics provides policy makers and business with high-quality international comparative data on the levels and structures of taxes in OECD countries. This complements the work on tax policy analysis, by providing regular quantitative comparisons of tax systems across OECD countries. The main outputs are two annual publications. Revenue Statistics presents a unique set of detailed and internationally comparable tax revenue data in a common format for all OECD countries from 1965 onwards. It also provides a conceptual framework defining which government receipts should be
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regarded as taxes and classifies different types of taxes. The 2011 edition was published in November 2011, with a special feature titled Changes to the guidelines for attributing revenues to levels of government. This publication reports tax revenues for each OECD country, providing a very detailed breakdown by type of tax. This allows a comparison of tax levels between countries (see figure p.93) and within countries across levels of government. It also enables an analysis of the differences in tax structure in OECD economies. Revenue Statistics builds on a very long tradition, but it is constantly refined to address emerging trends in government finances. One question currently being discussed relates to whether payments made by banks and other credit institutions to insure deposits made by customers should be classified as tax revenues. Taxing Wages provides unique information on the taxes paid on wages in OECD countries. It covers personal income taxes and social security contributions paid by employees; social security contributions and payroll taxes paid by employers and cash benefits paid to in-work families. The purpose is to illustrate how these taxes and benefits are calculated in each member country and to examine how they impact on household incomes. The results also enable quantitative cross-country comparisons of single persons and families with different levels of earnings. The publication shows this information for eight household types which vary by income level and household composition and the results reported include the marginal and average tax burdens (see figure p.94) for one and two earner families and the total labour costs of employers. These provide insights into the effects of direct tax systems on incentives for employment and increasing hours of work, and on the distribution of disposable income between different types of households.
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Total tax revenue as percentage of GDP, 2009

Denmark Sweden Italy Belgium Norway Austria Finland France Hungary Netherlands Luxembourg Slovenia Germany Estonia Czech Republic United Kingdom Iceland Canada Poland New Zealand Israel Spain Portugal Greece Switzerland Slovak Republic Ireland Japan Australia Korea Turkey United States Chile Mexico 0 10 20 30 40 50
Source: OECD (2011), Chart A. Total tax revenue as percentage of GDP, 2009, in Revenue Statistics, OECD Publishing, Paris.
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Income tax plus employee contributions less cash benefits, by family type (as % of gross wage earnings), 2010
I Single no child Belgium Germany Denmark Slovenia Austria Netherlands Hungary Italy Finland Norway France Turkey Luxembourg United Kingdom Iceland Sweden Poland Portugal United States Czech Republic Canada Ireland Australia Spain Slovak Republic Japan Estonia Greece New Zealand Israel Switzerland Korea Chile Mexico -10% -5% 0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50% I Married one-earner couple 2 children
Source: OECD (2011), Graph I.3. Income tax plus employee contributions less cash benefits: By family-type, as % of gross wage earnings, 2010, in Taxing Wages 2010, OECD Publishing, Paris.
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The 2010 version was published in May 2011, with a special feature on Wage Income Tax Reforms and Changes in Tax Burdens: 20002009. The 2011 version was published in May 2012 with a special feature titled Trends in personal income tax and social contribution schedules.
Tax Policy Activities with Non-OECD Economies

Tax policy activities with non-OECD economies include multilateral events (seminars/ workshops) on tax policy analysis, tax incentives and micro-simulation tax modeling, and regional events. The general aim of these outreach activities is to share experiences with various tax policies, and analytical methods and data to predict their likely impacts. For more information, please see Developing a Global Partnership.
Regional Programmes on Tax Policy Analysis and Statistics

The OECD manages a regional programme on tax policy analysis for countries in South East Europe (SEE) and a recently launched fiscal initiative for Latin American and Caribbean countries (LAC). Through these programmes, the OECD encourages countries to work together to develop comparable measures of tax revenues, effective tax rates and other tax indicators, and to share experiences with tax policies. To encourage and assist in this dialogue, the OECD offers support both by sharing information, data, analyses and experiences of OECD country tax officials, as reported in the OECD Tax Policy Studies series, and by organising workshops to help officials implement standard tax models to assess cross-country differences in effective tax rates on labour and capital income, and to estimate changes in and redistribution of tax burdens resulting from reforms. The fourth meeting of the South East Europe (SEE) Working Group on Tax Policy Analysis, co-chaired by Croatia, Bulgaria and Belgium,
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was held in December 2011. The meeting addressed a range of tax policy topics including: elements of a competitive tax system; pro-growth tax system design; environmentally-related taxes and energy efficiency; tax incentives for investment and tax expenditure reporting; and efficiency arguments for territorial tax treatment of foreign source income. Delegates considered draft guidelines on best practices in measurement, analysis, transparency, and reporting of tax incentives, and also reviewed a recently completed report, Taxation, Innovation and Training: A Report on SEE Country Approaches, and current OECD work on the topic of taxation and skills. The LAC Fiscal Initiative fosters evidence-based fiscal policy dialogue in the LAC region, aiming to improve taxation and public expenditure policies to support economic growth and income redistribution. A first meeting of the LAC Tax Policy Forum was held in September 2010 in Panama City, with over 60 tax officials from 14 Latin American and Caribbean countries attending. This meeting focused on the role of the tax system in reducing income inequality and promoting social cohesion.
Inaugural LAC Tax Policy Forum in Panama City. From left to right: Mr. Dayton-Johnson (OECD), Mr. Verdi (CIAT), Mr. Vallarino (Minister of Finance, Panama), Ms. Prez-Navarro (OECD), Mr. Lpez Lpez-Ros (Spanish Embassy to Panama), and Mr. Cucaln (MEF Panama)
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The second meeting of the LAC Tax Policy Forum will take place in Bogota, Colombia on 12-13 July 2012. This meeting will address the issues of tax incentives (in particular those designed to attract foreign direct investment) and informality, in support of fiscal consolidation. This dialogue is supported by the development of internationally comparable data. Revenue Statistics in Latin America is a joint publication by the OECD Centre for Tax Policy and Administration, the OECD Development Centre, the Economic Commission for Latin America and the Caribbean (ECLAC) and the Inter-American Center
Topics that have been addressed by CTPA in Tax Policy Studies include:
Taxation and Employment Choosing a Broad Base - Low Rate Approach to Taxation Tax Policy Reform and Economic Growth Taxation of SMEs: Key Issues and Policy Considerations T ax Effects on Foreign Direct Investment: Recent Evidence and Policy Analysis Fundamental Reform of Corporate Income Tax Encouraging Savings Through Tax-Preferred Accounts T axation of Capital Gains of Individuals: Policy Considerations and Approaches Fundamental Reform of Personal Income Tax Taxing Working Families: A Distributional Analysis The Taxation of Employee Stock Options E-Commerce: Transfer Pricing and Business Profits Taxation Recent Tax Policy Trends and Reforms in OECD countries Using Micro-Data to Assess Average Tax Rates Fiscal Design Survey across Levels of Government Tax and the Economy: A Comparative Assessment of OECD Countries
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of Tax Administrations (CIAT). Its aim is to provide internationally comparable data on tax levels and tax structures for a selection of LAC countries. The publication is based on the OECD Revenue Statistics model. By extending the OECD methodology to LAC countries, Revenue Statistics in Latin America enables meaningful cross-country comparisons about tax levels and tax structures not only between LAC economies, but also between them and their industrialised peers. For more information, visit the LAC-OECD Fiscal Initiative website: www.oecd/tax/lacfiscal. Key Events Second meeting of the LAC Tax Policy Forum, Bogot, 12-13 July 2012. Fourth meeting of the South East Europe Working Group on Tax Policy Analysis, Sofia, December 2011. Conference on Challenges in Designing Competitive Tax Systems, Paris, 30 June 2011. Key Publications Revenue Statistics 2011 (Special feature: Changes to the guidelines for attributing revenues to levels of government), November 2012 Taxing Wages 2011 (Special Feature: trends in personal income tax and social security contribution schedules), April 2012 Revenue Statistics in Latin America, January 2012 Matthews, S. (2011), What is a Competitive Tax System?, OECD Taxation Working Papers, No. 2, OECD Publishing. doi: 10.1787/5kg3h0vmd4kj-en Brys, B., S. Matthews and J. Owens (2011), Tax Reform Trends in OECD Countries, OECD Taxation Working Papers, No. 1, OECD Publishing. doi: 10.1787/5kg3h0xxmz8t-en
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Inventory of Estimated Budgetary Support and Tax Expenditures for Fossil Fuels, January 2012. Environmental Taxation A Guide for Policy Makers, September 2011 Taxation, Innovation and the Environment A Policy Brief, September 2011 Taxation, Innovation and the Environment, October 2010
Tax Policy Analysis and Statistics on the Web www.oecd.org/ctp/tpa OECD Tax Database: www.oecd.org/ctp/taxdatabase OECD/EEA database on environmental policy instruments (including taxes): www.oecd.org/env/policies/database Fossil fuel support: www.oecd.org/G-20/fossilfuelsubsidies LAC-OECD Fiscal Initiative: http://www.oecd.org/tax/lacfiscal
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Taxation of Multinational Enterprises

57% of tax administrators identified transfer pricing as being the lead risk focus area in the next 12 months. Transfer pricing was also the leading risk focus area for companies.
Ernst & Young 2011-2012 Tax risk and controversy survey (survey of 541 corporate executives and 100 audit committees across 18 geographic markets).
The Transfer Pricing Guidelines

Commercial transactions between different parts of a multinational group may not be subject to the same market forces shaping relations between two independent firms. Transfer prices payments from one part of a multinational enterprise for goods or services provided by another may diverge from market prices, with consequences for the division of tax revenues between governments. The standard, accepted worldwide, for multinational enterprises to price the cross-border transfer of goods, intangibles and services among related enterprises is the arms length principle set out in Article 9 of the OECD Model Tax Convention and the UN Convention, and described in the OECDs 1995 Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (the Guidelines). The Guidelines are not immovable: flexibility and adaptability are crucial to their success. They are therefore continuously reviewed and updated as needed.
Implementing and Updating the Guidelines: Guidance on Comparability and Profit Methods
A major revision to Chapters I-III of the Guidelines was completed in 2010. The new update included rewriting of sections of the
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Guidelines on comparability issues encountered when applying the transfer pricing methods authorised by the Guidelines, the application of transactional profit methods, i.e. the transactional profit split methods and the transactional net margin method, and an important new Chapter IX on the transfer pricing aspects of business restructurings. One of the pillars on which the arms length principle is based is the need to conduct a comparability analysis in order to compare conditions made or imposed between associated enterprises and those which would be made between independent enterprises, and to calculate the profits that would have accrued to the enterprise at arms length. The new Chapter III of the Guidelines reaffirms the central importance of comparability analyses and provides detailed guidance on how to perform them. The 2010 update to the Guidelines also took into account the experience acquired with the use of profit methods since the Guidelines were first published in 1995, and it removed their status as methods of last resort, indicating instead that the transfer pricing method selected should be the most appropriate to the circumstances of the case. The update also contains significant new guidance on the application of transactional profit methods, addressing aspects of the application of the profit split method, e.g. determining the combined profit to be split and how to split it, and analyzing issues that arise in applying the transactional net margin method, e.g. the standard of comparability, and the selection and determination of the net margin indicator.
Business Restructurings
Business restructurings by multinational enterprises have been a widespread phenomenon in recent years. They are typically aimed at rationalising supply chains and maximising synergies, and they involve the cross-border redeployment of functions, assets and/or
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risks between associated enterprises, which affects the profit and loss potential in each country. Restructurings may involve cross-border transfers of valuable intangibles. They typically consist of the conversion of full-fledged distributors into limited risk distributors or commissionaires for a related party that may operate as a principal; the conversion of full-fledged manufacturers into contract manufacturers or tollmanufacturers for a related party that may operate as a principal; and the rationalisation and/or specialisation of operations. These restructurings raise difficult transfer pricing issues, which caused the CFA to decide in 2005 to develop guidance on these issues. This work, which began with a roundtable discussion with business in 2005 and included the issuance of a public discussion draft in 2008, ultimately led to the addition of a new Chapter IX to the Guidelines in 2010. Chapter IX includes a detailed discussion of the transfer pricing aspects of risk bearing and risk transfers, including the extent to which contractual allocations of risks are to be respected, the role of comparables, and the role of the notions of control over the risk and of financial capacity to assume the risk. It also includes a discussion of the circumstances where, at arms length, the restructuring would be compensated. The new Chapter IX also clarifies that the arms length principle and the Guidelines should apply in the same way to transactions that result from a restructuring and transactions that are structured as such from the start, subject of course to the situations being otherwise comparable. It provides an example of application of the guidance to the implementation of a central purchasing function. Finally, guidance was added on the exceptional circumstances where a tax administration may not recognise, for transfer pricing purposes, the transactions as structured by the taxpayer.
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New Guidance on the Attribution of Profits to Permanent Establishments

Structures involving permanent establishments (PEs) have long been used by multinational enterprises (MNEs) in the financial sector, primarily by banks, and are increasingly created by business models now used outside the financial sector. The Guidelines address the application of the arms length principle to transactions between associated enterprises that are actually separate enterprises (e.g. subsidiaries). The 2008 Report on the Attribution of Profits to Permanent Establishments, which was issued after a multi-year project involving extensive consultation with business, outlined how this principle should apply to allocate an enterprises profits between its permanent establishment in one country and its operations in another country (e.g. the home office). The report covers general considerations, as well as special considerations for banks, global trading of financial instruments, and insurance. The conclusions of the Report were incorporated into the Model Tax Convention in a two step process: first, through amended Commentary to the pre existing Article 7 (Business Profits) which was included in the 2008 update to the Model Tax Convention, and secondly through a new text for Article 7 and accompanying Commentary which was included in the 2010 update. An updated version of the Report was released in July 2010 to conform the Reports cross references to Article 7 and the Guidelines to the new 2010 versions of each.
Current Work
The OECDs current transfer pricing work focuses on two main projects. The first one, which got underway in 2011, is an examination of the transfer pricing aspects of intangibles (see www.oecd.org/ ctp/tp/intangibles). The project is expected to lead to a revision of the existing guidance in Chapters VI and VIII of the Guidelines and to address issues such as: definitional issues; economic versus legal ownership; characterisation of transfers of intangibles; and
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valuation issues. The project will also seek to address the transfer pricing treatment of location-based advantages, market premiums and the treatment of corporate synergies. In this project, the OECD intends to tackle one of the most complex and controversial areas of transfer pricing today. The second important project underway in the transfer pricing area seeks to simplify substantive rules and administrative practices. The Transfer Pricing Guidelines are long and detailed, and sometimes can be difficult to apply, particularly for tax administrations in developing countries with limited experience and limited resources. Dispute resolution mechanisms are sometime overtaxed and take longer to find solutions to cases than is desirable. The OECD transfer pricing simplification project will seek to address some of these problems through five simplification work streams. These include: (i) a revision of the current guidance on safe-harbour provisions; (ii) creation of sample memoranda of understanding for use by country competent authorities in developing bilateral safe harbours and resolving groups of common transfer pricing cases; (iii) work on simplifying documentation rules; (iv) developing clearer guidance on low value adding services; and (v) work on simplifying the APA process.
Global Forum on Transfer Pricing

Transfer pricing has become a global issue. In recognition of that fact, the OECD organised the first meeting of the new Global Forum on Transfer Pricing in March 2012. Nearly 300 government transfer pricing experts from nearly 90 countries participated in the meeting. They had an opportunity to share views on difficult technical and administrative issues and to learn from one another about the best approaches to administer a transfer pricing system based on the arms length principle. The Steering Committee of the Global Forum, which is comprised of representatives of 21 developing and developed economies, has undertaken a project to prepare a
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practical guide to transfer pricing risk assessment in advance of the next meeting of the Global Forum in March 2013. The Global Forum will provide a venue for all countries to come together to improve the operation of transfer pricing administration around the world.
Key Events Global Forum on Transfer Pricing, March 2013, Paris, France. Global Forum on Transfer Pricing, 26-27 March 2012, Paris, France. Key Publications Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations, OECD 2010. Report on the Attribution of Profits to Permanent Establishments (Web report), July 2010. Transfer Pricing on the Web www.oecd.org/ctp/tp
Did you know that major non-OECD economies like

China, India, South Africa, Russia, Indonesia and Singapore base their transfer pricing legislation on the OECD Guidelines and participate in the OECD work on transfer pricing aspects of intangibles?
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Consumption Taxes
Businesses need a set of internationally agreed principles to ensure a consistent interaction of VAT/GST systems in an international context. We have been co operating with the OECD in developing a set of principles over recent years and we are particularly pleased with the progress made in a very constructive spirit. We look forward to continuing this co-operation going forward.
Karl-Heinz Haydl Chair of the BIAC VAT Committee The spread of Value Added Tax (also called Goods and Services Tax GST) has been the most important development in taxation over the last half century. Limited to less than ten countries in the late 1960s, it has now been implemented by more than 150 countries and it accounts for one fifth of total tax revenue in the OECD and worldwide. The recognised capacity of VAT to raise revenue in a neutral and transparent manner has drawn all OECD member countries, except the United States, to adopt this broad-based consumption tax. Its neutrality principle towards international trade has also made it the preferred alternative to customs duties and sales taxes in the context of trade liberalisation. OECD member countries have relied increasingly on Value Added Tax (VAT) as a source of revenues. VAT has become the third largest source of revenue for OECD countries as a whole, behind personal income taxes and social security contributions. The variation in the share of VAT in member countries total revenues (the tax mix) is considerable, but in 27 of the 33 OECD countries with VAT, the tax accounts for more than 15% of total taxation. The substantially increased importance of VAT has served to compensate for the diminishing share of specific consumption taxes (mostly on tobacco, alcoholic drinks and fuels). The share of these specific taxes on
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consumption more than halved between 1965 and 2009. The figure below shows the share of the main taxes in total revenues in the OECD area.
Share of taxes to total revenue

Personal income tax VAT 35 30 25 20 15 10 5 0 1965 1975 1985 1995 2005 2009 Social security contributions Specic consumption taxes Corporate income tax
The International VAT/GST Guidelines

The spread of VAT across the world has coincided with the rapid globalisation of economic activity during the past decades. Within international trade, services trade has grown particularly strongly in recent years. As a result, the interaction between value added tax systems operated by individual countries has come under greater scrutiny as potential for double taxation and unintended non-taxation has increased. Research by the OECDs Committee on Fiscal Affairs (CFA) in co-operation with business, has shown that the current international consumption taxes environment, especially with respect to trade in services and intangibles, is creating obstacles to business activity, hindering economic growth and distorting competition. Complex, unclear or inconsistent rules across jurisdictions are difficult to manage for revenue bodies and create uncertainties and high compliance costs, which can lead to
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reduced compliance. Such an environment may also facilitate tax fraud and avoidance. The CFA therefore launched a project for the development of OECD International VAT/GST Guidelines in 2006, aimed at providing guidance to governments on applying VAT to international trade (www.oecd.org/ctp/vatguidelines). These Guidelines are developed in stages, building up to a complete set of guidelines over time. Draft Guidelines on the place of taxation for cross-border supplies of services and intangibles between businesses (B2B) were published for public consultation in February 2010. Under these Guidelines, taxing rights are allocated to the jurisdiction in which the business customer is located. The public consultation showed overall support for this approach. In June 2011, Guidelines on VAT-neutrality were adopted after a successful public consultation, providing guidance to governments on ensuring neutrality of VAT for businesses in an international context. The need for these guidelines was underpinned by the results of a survey of more than 300 businesses around the world which confirmed that recovering VAT paid in foreign countries was often costly and in a significant number of cases even impossible. The CFA is now developing further guidance for the implementation of the Guidelines on neutrality in practice. It is also developing guidance on place of taxation of cross-border supplies of services and intangibles to businesses that operate on the basis of a branch structure. Finalising the OECD International VAT/GST Guidelines as an internationally agreed framework for the application of VAT to international trade, is a priority of the OECDs work in the area of VAT.
VAT Abuse
Despite their self-policing features, VAT systems have been subject to a significant level of fraud and aggressive tax planning over recent years, especially among EU countries. Given the extent and nature of abuses of the VAT systems, the CFA has established a secure system
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for member countries to exchange information about various types of frauds, avoidance and other abusive practices. This information is not taxpayer specific, but rather acts as a means of alerting member countries to possible attacks on their VAT systems.
Consumption Tax Trends

This biennial publication is a unique source of detailed and internationally comparable data on consumption taxes. It notably provides detailed information on rates and rate evolutions, on exemptions, on registration thresholds as well as analysis of the main policy trends. It also contains an estimate of OECD countries VAT Revenue Ratio (VRR). This ratio expresses actual VAT receipts as a proportion of the receipts that would be obtained if the countrys standard VAT rate had applied to all private consumers expenditure. It provides an indicator of the combined effect of loss of revenues as a consequence of exemptions and reduced rates and fraud. The unweighted average of the VRR for all OECD countries is 58% (figures 2008), suggesting that 42% of the potential revenue is not collected.
Key Events Workshop on International VAT Fraud and Exchange of Information, Moscow, September 2011. Workshop on VAT-treatment of tradable CO2 emission permits, Paris, July 2011. VAT Guidelines Validation Workshop, South African Development Community (SADC), Johannesburg, June 2011. Key Publications Consumption Tax Trends 2010: VAT/GST and Excise Rates, Trends and Administration Issues, October 2012, OECD. Guidelines on Neutrality, June 2011.
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Draft Guidelines on the application of VAT/GST to the international trade in services and intangibles for public consultation (February 2010). Consumption Tax on the Web
www.oecd.org/ctp/ct Sign-up to receive VAT news alerts at www.oecd.org/oecddirect
Did you know in 27 of the 33 OECD countries with VAT,

the tax accounts for more than 15 percent of total taxation?
Did you know the share of taxes on general consumption

as a percentage of total taxation has risen to 20%?
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International Tax Co-operation
The unprecedented liberalisation of national economies and progress in information and telecommunication technologies has made cross-border investment and business easier and more accessible to a wider spectrum of the population. In contrast, tax administrations are not free to carry out their functions beyond their national borders. As a result, the proper exercise of fiscal sovereignty depends upon international co-operation. The OECD promotes this approach, rather than tax harmonisation to counter international tax evasion. The Organisations work in this field includes countering harmful tax practices, improving the legal and practical aspects of exchange of information, combating aggressive tax planning and corruption, strengthening co-operation between tax and antimoney laundering authorities and facilitating collection assistance.
India signing the Convention on Mutual Administrative Assistance in Tax Matters, Paris, France, 26 January 2011- (Left/Right) - Rintaro Tamaki, Deputy Secretary-General of the OECD and Shri Sanjay Kumar Mishra, Joint Secretary-I Foreign Tax and Tax Research Division, Central Board of Direct Taxes, Department of Revenue, Ministry of Finance of India.
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The Harmful Tax Practices Project

OECD members seek to establish standards that encourage an environment in which fair competition can take place. In the tax area this means promoting principles that are designed to enable countries to apply their own tax laws without the interference of practices that operate to undermine the fairness and integrity of their respective tax systems. To achieve this, the OECD sets out criteria for evaluating preferential tax regimes and identifying tax havens, and has worked since 1998 with both OECD and other economies to address harmful tax practices. In 1998, the OECD issued a report entitled Harmful Tax Competition: An Emerging Global Issue. The Report focused on geographically mobile activities, such as financial and other services activities, including the provision of intangibles, and divided the work into three areas: (1) member country preferential regimes, (2) tax havens, and (3) non-OECD economies. The report set out four key factors used to define tax havens: 1) no or nominal tax on the relevant income; 2) lack of effective exchange of information; 3) lack of transparency; 4) no substantial activities. No or nominal tax is not sufficient in itself to classify a jurisdiction as a tax haven. The report Towards Global Tax Co-operation: Progress in Identifying and Eliminating Harmful Tax Practices (2000) outlined the progress made and, among other things, identified 47 potentially harmful regimes within OECD members as well as 35 jurisdictions
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Today El Salvador becomes a member of the Global Forum on Transparency and Exchange of Information for Tax Purposes, and with it my country recognises the importance of this international effort and the work of the OECD. On 16 January 1992 the guns went silent and we started a long process of building peace and the first lesson was that the latter does not come automatically with the former. Neither side won the war, but both won the peace, and both learned that the best way to make such a social contract work is through solid and strong institutions and life under the rule of law. There is an important difference between repressive governments based on power and strong states based on the rule of law. It is with this spirit, with this view of the importance of institutions, both national and international, that El Salvador joins the Global Forum as its 105th member.
Francisco Galindo Vlez, Ambassador of El Salvador in France, 25 October 2011
found to have met the tax haven criteria (in addition to the 6 jurisdictions meeting the criteria that had made advance commitments to implement the OECD standards of transparency and exchange of information). Progress reports were released in 2001, 2004 and 2006. The jurisdictions that had committed to implement the standards were invited to participate in the Global Forum on Taxation along with OECD members to further articulate the standards of transparency and exchange of information to ensure their implementation. The Global Forum developed in 2002 the Model Agreement on Exchange of Information in Tax Matters, and in 2005 agreed standards on transparency relating to availability and reliability of information. Since 2006, the Global Forum has published annual assessments of progress in implementing the standards.
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In September 2009, the Global Forum was renamed the Global Forum on Transparency and Exchange of Information for Tax Purposes, and was restructured to expand its membership and its mandate and improve its governance. For more information, see the Hot Topic: Exchange of Information.
Comprehensive Exchange of Information

Effective exchange of information requires a legal mechanism that permits exchange of information between two or more jurisdictions. The Committee has developed several bilateral and multilateral instruments that can be used as a framework for exchange of information for tax purposes. The OECD standard on information exchange is relevant not just for OECD members, but has also found wide support beyond the Organisations membership. The OECD standard has been endorsed by the G-20 and by the UN Committee of Experts on International Co-operation in Tax Matters. It can be implemented through a variety of different means including bilateral tax treaties or tax information exchange agreements. Some of the main instruments are described below:
Article 26 of the OECD Model Tax Convention

Article 26 of the OECD Model Tax Convention on Income and on Capital provides for exchange of information in the context of a comprehensive bilateral income tax treaty. Over 3000 bilateral tax treaties are based on the OECD Model Tax Convention. Article 26 sets forth the rules under which information may be exchanged between tax authorities. It does not limit the form of such exchanges, although the main forms used are on request, automatic and spontaneous exchange. Article 26 first establishes the obligation to provide information to a treaty partner and the circumstances under which this obligation exists. It then sets out rules that ensure that any information provided to a treaty partner is subject to strict confidentiality that protect the
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legitimate privacy rights of any person to whom the information relates. Finally, it provides certain exceptions from the obligation to provide information, but notes specifically that grounds for declining a request cannot be based on bank secrecy or the absence of a domestic tax interest in the information. Reservations on these latter points have been withdrawn by all OECD and non-OECD countries that previously held reservations. Following the withdrawal of reservations by Austria, Belgium, Luxembourg and Switzerland in March 2009, Article 26 has the support of all OECD members and non-members. The Committee on Fiscal Affairs promotes all forms of exchange of information and examines best practices in order to improve the efficiency of the operation and use of all forms of information exchange. The Committee continues to develop technological improvements to update the IT standards needed to exchange data automatically in a secure manner. The OECD Standard Magnetic Format and the most recent Standard Transmission Format have been used by the EU to develop its own standard for the implementation of the EU Savings Directive. The OECD is working closely with the EU and others on these issues to have consistency and avoid duplication of work. Countries are putting more importance and emphasis on automatic exchange of information as a solution for ensuring proper taxation. Setting up and operating an automatic exchange system requires sophisticated tax administrations both in the sending and receiving country and a solid IT framework. Sending data which is not standardised is of little value to the receiving country, as it cannot process it and match it against tax returns. Similarly, sending completely standardised data is of limited use if the receiving country does not have the capacity to process it automatically.
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Convention on Mutual Administrative Assistance in Tax Matters
Japan signing the Convention on Mutual Administrative Assistance in Tax Matters, 3 November 2011 - (Left/Right) Francois Baroin, Minister of Finance of France; Motohide Yoshikawa, Ambassador of the Japanese Permanent Delegation to the OECD and Angel Gurra, OECD Secretary-General at the signing of the Convention on Mutual Administrative Assistance in Tax Matters. G-20 Cannes, France.
The multilateral Convention on Mutual Administrative Assistance in Tax Matters provides for exchange of information for a wide range of taxes as well as other forms of mutual assistance such as assistance in the collection of taxes and the service of documents. It is a multilateral instrument developed in the 1980s jointly by the OECD and the Council of Europe. The Convention allows for exchange of information for all tax purposes, assistance in tax collection, but also for multilateral exchange and in particular multilateral simultaneous tax examinations. The Convention was recently amended to bring it up to current international standards and allow all countries to sign it. The amended Convention entered into force on 1st June 2011. The current Signatories to the Convention/amended Convention are: Argentina, Australia, Azerbaijan, Belgium, Brazil, Canada, Costa
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Rica, Denmark, Finland, France, Georgia, Germany, Greece, Iceland, India, Indonesia, Ireland, Italy, Japan, Korea, Mexico, Moldova, the Netherlands, Norway, Poland, Portugal, Russia, Slovenia, South Africa, Spain, Sweden, Turkey, Ukraine, the United Kingdom and the United States. For more information, see the Hot Topic: Exchange of Information.
2002 Model Agreement on Information Exchange on Tax Matters

This model was developed by the Global Forum in the context of the harmful tax practices project described above. It provides both a bilateral and multilateral model for exchange of information. Unlike Article 26 and the Convention on Mutual Administrative Assistance in Tax Matters, it is limited to exchange of information on request. Protecting the Confidentiality of Tax Information Mechanisms for exchange of information need to balance the interest of tax authorities to have access to pertinent information with the need to protect the legitimate interests of taxpayers in privacy and to guarantee the confidentiality of taxpayer information. All exchange of information instruments developed by the OECD recognise that there are legitimate reasons for declining to provide information, for instance, in cases where information contains a trade secret or is protected by attorney-client privilege. In addition, the instruments impose strict rules of confidentiality on any information supplied to the tax authorities of another country and prohibit fishing expeditions. These rules restrict the persons to whom information may be disclosed and the purposes for which the information may be used. OECD countries will not respond to requests for information unless they are confident that the confidentiality of the information exchanged will be respected. For more information, see the recently published report Keeping it Safe: The OECD Guide on the Protection of Confidentiality of Information Exchanged for Tax Purposes.
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Promoting Effective Exchange of Information Beyond the OECD

Effective exchange of information is a global issue, and the OECD continues to promote standards of information exchange throughout the world. Regular events are held with the Inter-American Center of Tax Administrations (CIAT), the Centre for Meetings and Studies of Directors of Tax Administrations (CREDAF), the Intra-European Organisation of Tax Administrations (IOTA), the Study Group on Asian Tax Administration and Research (SGATAR), the African Tax Administration Forum (ATAF), and other organisations, for the purpose of exchanging experiences between OECD and non-OECD economies regarding exchange of information and to identify ways of improving the efficiency of this process.
Improving the Technical and Practical Aspects of Information Exchange

Systems and procedures are continuously being developed to improve the quality of and to facilitate the exchange of tax information between countries, taking into account the latest technological developments. A key aspect of this work is to ensure that existing standards of data integrity and security are not compromised when information is exchanged electronically. The technological and operational improvements developed will incorporate the requirements of both direct and indirect tax administrations. With respect to automatic exchange of information, a new OECD Standard Transmission Format was designed based on Extensible Markup Language (XML) and a tool kit is available on the OECD website: www.oecd.org/tax/eoi. There is also an increased focus on the practical and operational aspects of information exchange. For instance, a Manual on Information Exchange has been developed which provides practical assistance to officials dealing with all forms of exchange of
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information for tax purposes. It is available on the OECD website: www.oecd.org/ctp/eoi/manual. CIAT has developed a similar manual.
Assistance in Tax Collection

Globalisation not only makes it harder for tax authorities to accurately determine the correct tax liabilities of taxpayers but also makes it more difficult to collect taxes owed. Taxpayers may have assets around the world but tax authorities generally cannot go beyond their domestic borders to take action to collect taxes. For this reason an article on collection assistance is now included in the OECD Model Tax Convention as new Article 27. The Convention on Mutual Administrative Assistance in Tax Matters also provides for collection assistance. A manual on the implementation of collection assistance has been developed and is available on the OECD taxation website (www.oecd.org/tax/eoi).
Tax Crimes, Corruption and Money Laundering

Tax evasion and money laundering often thrive together. In February 2012, G-20 Finance Ministers called on the OECD, together with the Financial Action Task Force (FATF), to report on steps taken to prevent the misuse of corporate vehicles and improve interagency co-operation in the fight against illicit activities. The OECDs Committee on Fiscal Affairs, working with FATF, has developed some new tools to help improve co-operation between tax and antimoney laundering authorities and enhance governments ability to combat money laundering and tax crimes. The OECDs work on tax crime and money laundering is designed to complement that carried out by FATF. This work is pursued in a variety of ways including typologies exercises, developing practical guidance on detection of money laundering for tax auditors, examining key risk areas and reviewing current country practices for sharing information between tax and anti-money laundering
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Russia Signs OECD Anti-Bribery Convention, 17 February 2012 - (Left/Right) Angel Gurra, SecretaryGeneral of the OECD and Andrey Denisov, First Deputy Minister of Foreign Affairs of the Russian Federation. OECD, Paris, France.
authorities. The CFA has designed a Money Laundering Handbook to assist tax examiners in detecting and deterring money laundering. In 2010, the OECD issued a broader Recommendation to Facilitate Co-operation between Tax Authorities and Other Law Enforcement Authorities to Combat Serious Crimes, advocating greater cooperation and better information sharing between different government agencies involved in the fight against financial crimes both domestically and internationally. For more information, see Hot Topic on Oslo Dialogue : A Whole of Government Approach to Fighting Financial Crime.
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Key Events Second annual Forum on Tax and Crime, 14-15 June 2012, Rome, Italy Tax and Crime Conference, 21-23 March 2011, Oslo, Norway Global Forum on Transparency and Exchange of Information for Tax Purposes, 31 May-1 June 2011, Bermuda Key Publications Keeping it Safe: The OECD Guide on the Protection of Confidentiality of Information Exchanged for Tax Purposes (2012) The Multilateral Convention on Mutual Administrative Assistance in Tax Matters - Amended by the 2010 Protocol (June 2011) Offshore Voluntary Disclosure: Comparative Analysis, Guidance and Policy Advice (September 2010) Recommendation to Facilitate Co-operation between Tax and Other Law Enforcement Authorities to Combat Serious Crimes (2010) Money Laundering Awareness Handbook for Tax Examiners (October 2009) Engaging with High Net Worth Individuals on Tax Compliance (September 2009) OECD Bribery Awareness Handbook for Tax Examiners (September 2009) Recommendation on Tax Measures for further Combating Bribery of Foreign Public Officials in International Business Transactions (May 2009)
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International Tax Co-operation on the Web Exchange of Information www.oecd.org/tax/eoi Harmful Tax Practices www.oecd.org/ctp/htp Tax Treatment of Bribes www.oecd.org/ctp/ttb Manual on Information Exchange www.oecd.org/ctp/eoi/manual Tax Crimes and Money Laundering www.oecd.org/ctp/taxcrimes Global Forum on Transparency and Exchange of Information for Tax Purposes www.oecd.org/tax/transparency
Did you know that all the OECD and non-OECD countries
that have set out their position in the OECD Model Tax Convention have withdrawn their reservations to Article 26 of the Model?
Did you know that an increasing number of countries

tax administrations and Financial Intelligence Units exchange information that helps the efforts against money laundering, corruption and financing of terrorism?
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Tax Administration
The OECD Forum on Tax Administration (FTA) is an international body where Tax Commissioners co ordinate their actions to improve compliance and the quality of taxpayer services. As the global economy becomes increasingly integrated, Commissioners from forty-four countries communicate on a regular basis and work together to enhance tax administration around the world. I am honoured to lead the FTA and work with my colleagues during these challenging economic times.
Douglas Shulman, Commissioner of Internal Revenue and Chair of the FTA
U.S. Commissioner of Internal Revenue and Chair of the FTA, Douglas Shulman, speaking at the United States Council for International Business Conference, The OECDs Evolving Role in Shaping International Tax Policy, Washington, USA.
In July 2002, the Forum on Tax Administration (FTA) was established to develop effective responses to tax administration issues in a collaborative fashion. The FTA aims to influence the environment within which tax systems operate: to move away from a
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conflictual dialogue to a constructive dialogue with taxpayers. To do this, it brings together commissioners to share information and experience, and to identify international good practices for resolving particular administration issues. To ensure that such information and experiences are made available to other revenue bodies, they are published in the tax administration guidance series. The CTPA supports the work of the FTA in the pursuit of its key objectives in a broad range of areas.
Buenos Aires Forum on Tax Administration Meeting

At the Seventh Meeting of the Forum on Tax Administration in Buenos Aires, Argentina, held in January 2012, Tax Commissioners from OECD and non-OECD countries met to discuss: Taking the relationship with large business further Working Smarter Offshore Compliance The Communiqu issued at the conclusion of the meeting set out the agreement of the Commissioners participating: To use the FTA Offshore Compliance Network to build on the achievements of individual countries to improve collective ability to deter, detect, and deal with offshore tax evasion. To foster a more constructive relationship between large businesses and tax administrations to improve compliance. To remain committed to sharing best practices among itsmembers and with developing countries to continually improve the quality of tax administration across the world.
Next Forum meeting of Tax Commissioners

The next meeting of the FTA will take place on 16-17 May 2013 in Moscow, Russia.
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Commissioners at the Seventh Meeting of the Forum on Tax Administration, Buenos Aires, Argentina, 18-19 January 2012
Improving Voluntary Compliance

The FTA recognises that tax compliance requires a balance between enforcement and service. Recent work undertaken by the FTA has examined compliance management, including risk management, to identify innovative ways that revenue bodies can promote greater voluntary compliance and reduce costs for taxpayers. Its studies and Information and Guidance Notes aim to provide support for compliance improvement in participating countries across a wide range of taxpayer segments. Taxpayers with an international footprint International compliance has been a key topic for the FTA since its meeting in Seoul, Korea in September 2006 leading to a number of studies focusing on the role of tax intermediaries, compliance by
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banks and compliance by high net worth individuals. The international compliance theme continues to be an important focus for the work of the FTA.
Offshore Compliance
The FTA has created the Offshore Compliance Network (OCN) to build on the achievements of individual countries and use the power of co ordinated action and multilateral collaboration to improve the ability of tax administrations to deter, detect and deal with offshore tax evasion. It is lead by the United States and France. The inaugural meeting took place in September 2011 where 40 experts in tackling offshore tax evasion from 26 FTA member countries came together to discuss the following themes: Voluntary Disclosure Regimes Making Use of Data held by Financial Institutions Techniques & Promoters
High Net Worth Individuals

The FTA has created a separate network for the leaders of units and specialists dealing with the affairs of High Net Worth Individuals (HNWIs). The network enables participants to discuss practical ways in which they are implementing the recommendations of the FTAs 2009 report on Engaging with HINWIs and current developments in this taxpayer segment. The High Net Worth Individuals Network (HNWIN) is building on the findings of the FTAs 2009 report entitled Engaging with High Net Worth Individuals. The FTA Commissioners decided to create this Network to connect the leaders of teams dealing with HNWIs in their countries. It is lead by France. The network exists to identify practical means of improvement in certain key areas:
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Understanding this key customer segment, in terms of its size, behavioural trends and areas of emerging risk; Best practice and current strategies for dealing with this taxpayer segment, including co operative compliance initiatives; Organisational models and developing the capability to deal with HNWIs effectively; and Examination techniques and relationship management. Large Business Taxpayers including Banks At its Seoul meeting the FTA commissioned a study, published in 2008, into the role of tax intermediaries in relation to voluntary compliance and to the promotion of aggressive tax planning. This study evolved into a wider examination of the tripartite relationship between revenue bodies, business and tax intermediaries, and its potential influence on large business compliance. This theme of finding new ways to improve large taxpayer compliance, including through building enhanced engagement and greater trust between the parties, recurred in a number of subsequent FTA studies and reviews of experience. Because of the financial crisis a number of these studies had a particular emphasis on banking. Identifying country experience of finding more effective ways of improving large business compliance will also be a focus of the new network of heads of Large Business Operations in FTA countries.
Dealing Effectively with the Challenges of Transfer Pricing

The FTA recognised that transfer pricing remains one of the most significant tax administration issues for tax administrations and large businesses and both had an interest in improving the
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management of transfer pricing programmes. With that end in mind, the FTA undertook a study and published a report on the current practical issues in the field and some of the best practices that have been developed to meet the challenges of transfer pricing. Technical analysis of how transfer prices should be computed in accordance with the arms length principle is outside the scope of this report. Instead the report focuses on the practical experiences of a number of FTA member countries and some non-member countries. The report discusses ways in which the management of transfer pricing programmes can be optimised, so that transfer pricing audits and enquiries are conducted efficiently and in a timely manner, for the benefit of MNEs and tax administrations alike. It identifies the practical steps tax administrations need to take to correctly identify transfer pricing cases that merit audit or enquiry and then to progress those cases to as early a conclusion as possible.
Effective Compliance Risk Management Techniques

The vastly increased demands on revenue bodies in todays world require them to have a thorough and systematic approach for identifying key compliance risk areas and the strategy for addressing those risks, such as service, education, audits, enforcement or legislative change. Tax administrators must design a strategy for each of their major compliance risks, recognising that non-compliance behaviours and attitudes vary substantially across different taxpayer segments. This represents one of the most significant challenges to effective administration of tax laws. The FTA helps member countries share approaches on compliance risk management (and associated research efforts) and to prepare materials on successful practices for the guidance of OECD member countries and non-members.
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The FTA Guidance Note: Compliance Risk Management: Managing and Improving Tax Compliance promotes compliance risk management as an essential management tool for revenue bodies and describes practical approaches that could be adopted. The recommended model of compliance risk management, which draws on leading revenue body experience and underpins the work of the FTA, is set out below.
The Compliance Risk Management Process

Operating Context
Identify risks Assess and prioritise risks
Monitor Monitor performance performance against againstplan plan
Evaluate Evaluate compliance compliance outcomes outcomes

Registration Filing Reporting Payment
Analyse compliance behaviour (causes, options for treatment) Determine treatment strategies Plan and implement strategies
Follow-up work in this domain included the development of practical guidance for revenue bodies to assist with the evaluation of their risk treatment strategies. A guidance note, and accompanying background materials, published in October 2010 set out a practical methodology for conducting outcome evaluations of compliance risk treatment strategies undertaken by revenue bodies in priority areas. The guidance draws on innovative work carried out by one of the leading revenue bodies in the OECD, as well as research carried out by staff working on EC tax programmes, and is supplemented by further practical guidance (including by way of many case study examples) from a number of other revenue bodies.
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Recent reports in this area include a study of revenue bodies successful strategies for reducing opportunities for informal/cash/ underground economy activities, and the use of electronic payment systems to conceal (and reveal) taxpayers incomes, especially those in offshore locations. Also underway is a separate study of revenue bodies successful strategies entailing proactive measures to prevent non-compliance in the SME sector.
Key reports include:

R educing Opportunities for Tax Non-compliance in the Underground Economy (January 2012) R ight from the Start: Influencing the Compliance Environment for Small and Medium Enterprises (January 2012) Measuring the effectiveness of compliance risk treatments (October 2010) Understanding and influencing taxpayers behaviour (October 2010)
Corporate Governance
A landmark achievement in the Forum on Tax Administrations efforts to promote tax risk management as an element of good corporate governance was securing agreement on the inclusion of a new recommendation on this topic in the 2011 revision of the OECD Guidelines for Multinational Enterprises: Recommendations for Responsible Business Conduct in a Global Context. The FTA is now discussing with business how to ensure that the recommendation receives appropriate attention and to assess the degree to which practical governance of tax in MNEs is in line with the guidelines.
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Taxpayer Service Delivery

Service is a key component of any revenue bodys strategy for improving compliance with tax laws. Over the last decade, the capacity of revenue bodies to expand the range of services provided, and improve service delivery, has been greatly enhanced by developments with, and growth in the use of, modern information technology systems. The FTA continues to examine how revenue bodies can improve the delivery of taxpayer services, including the use of electronic services. Electronic services enable tax administrations to deliver faster, cheaper, more tailored services. In late-2009, a major survey of revenue bodies in OECD and selected other countries was undertaken to assess their progress, and plans for, the deployment of modern electronic services in taxpayer service delivery. The survey report and related tabulations, which were published in March 2010, provide a very comprehensive assessment of revenue bodies progress with, and plans for, the deployment of technology to deliver services to taxpayers and topics examined included; 1) revenue bodies strategic directions; 2) specific e-services (e.g. e-filing, e-payment, pre-filling, online/ real time personal taxpayer information); 3) use of telephony; 4) whole of government service delivery approaches; and 5) security, authentication, and authorisation. The work also included the development of a maturity framework for the provision of electronic services that would enable revenue bodies to gauge their progress towards achieving a transformational level of capability. The studys findings note that many revenue bodies have made considerable progress over the last 5-6 years in the development, delivery and exploitation of electronic services. However, many challenges remain and most revenue bodies have some way to go
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to realise the transformational level of competence set out in the framework. Recent reports concerned identifying key issues related to security and authentication in the delivery of electronic services to taxpayers and how these issues are being addressed by revenue bodies, and developments with the use of social media technologies in tax administration.
Comparative Data on Tax Administration

In todays rapidly changing environment revenue bodies are being asked to do more with less, to take on new tasks, and at the same time ensure that governments have the revenues they need to finance important programmes that benefit their citizens. In facing this challenge, revenue bodies around the world are seeking ways to make tax administration within their countries both more effective and more efficient. One of the ways many of them seek to do this is by comparing their structures, operations and performance with comparable organisations. The CTPA and the FTA have been supporting revenue bodies in this area through its research and associated report, Tax Administration in OECD and Selected Non-OECD Countries: Comparative Information Series. Published every two years, and now in its
fourth (2010) edition, this series contains a wide range of insightful, comparative data on aspects of tax administration around the world. Almost 50 countries have contributed to the research that went into this publication every OECD member country, as well as EU, G-20, and selected other countries. It provides a unique insight into the tax administration environment. Not only does it promote greater understanding between countries by setting out the context in which revenue bodies operate, but it is also a key tool to assist both administrators and policy makers in identifying the key trends and innovations in tax administration.
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The latest edition describes institutional setups, organisational arrangements and reforms, aspects of strategic management, resourcing, key areas of operational performance, the use of technology, and elements of the legislative and administrative framework for administration across the 49 countries covered by the series. There is also a new section dealing with selected aspects of human resource management. The series uses data, analysis and country examples to highlight key trends, recent innovations, and examples of good practice and performance measures/ indicators. Armed with such knowledge, revenue bodies should be better equipped to undertake their own comparative analyses and benchmarking studies, particularly for performance-related aspects and for assessing comparative efficiency.
Key Events Eighth Meeting of the FTA, 17-18 May 2013. FTA Taxpayer Services Sub-Group Meeting, 26-28 September 2012 FTA SME Compliance Sub-Group Meeting, 25-27 April 2012 Key Publications Dealing Effectively with the Challenges of Transfer Pricing (January 2012) Executive Overview: Working Smarter (January 2012) Working smarter in structuring the administration, in compliance, and through legislation (January 2012) Working smarter in revenue administration: Using demand management strategies to meet service delivery goals (January 2012)
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Reducing Opportunities for Tax Non-compliance in the Underground Economy (January 2012) Security and Authentication Issues in the Delivery of Electronic Services to Taxpayers (January 2012) Right from the Start: Influencing the Compliance Environment for Small and Medium Enterprises (January 2012) Tax Administration in OECD and Selected Non-OECD Countries: Comparative Information Series 2010 (March 2011) Social Media Technologies and Tax Administration (October 2011) Tax Repayments: Maintaining the Balance Between Refund Service Delivery, Compliance and Integrity (May 2011) Security and Authentication Issues in the Delivery of Electronic Services to Taxpayers (January 2012) Social Media Technologies and Tax Administration (October 2011) Tax Administration on the Web www.oecd.org/tax/fta
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Aggressive Tax Planning
The OECDs work in this area helps tax authorities to respond more quickly to tax risks, to identify trends and patterns in aggressive tax planning based on country experiences, and to share responses in dealing with them. The timely sharing of such information is intended to assist member states in understanding new schemes, facilitate their detection, and enable countries to adapt their risk management strategies and identify successful legislative and administrative responses. Recent projects in this area include reports on the tax risks involving bank losses, followed by a report on corporate losses across business sectors, a report on disclosure initiatives and hybrid mismatch arrangements. The work is supported by the OECDs Aggressive Tax Planning directory and through seminars and workshops.
ATP Directory
The directory contains information on scheme types, how they were detected, and what governments are doing about them. It does not contain any taxpayer-specific information (i.e. they do not disclose the identity of the taxpayers involved) and thus protect taxpayer privacy. Schemes set out fact patterns and the legal provisions being exploited. The inclusion of a scheme shows that one or more countries thought it useful to share information on a scheme with other interested countries, but it does not indicate any legal or other judgment about the scheme on the part of the OECD or its membership. In addition, inclusion of a scheme in the directory does not mean that all OECD member countries will agree that the scheme constitutes aggressive tax planning. Access to the directory is limited to government officials from OECD member countries.
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ATP Reports
Addressing Tax Risks Involving Bank Losses The role of banks in the global economy, as well as in the functioning of countries tax systems, is of vital importance. The financial and economic crisis had a devastating impact on bank profits, with loss-making banks reporting global commercial losses of around USD 400 billion in 2008. As a result of the financial crisis, a large number of banks have sustained substantial losses. The scale of those losses, and the potential regulatory capital, profit and cashflow benefits for banks able to convert them into cash, mean that revenue bodies must be alert to potential tax compliance risks as a result of aggressive tax planning involving losses. The OECD published a report dealing with the tax risks involving bank losses in September 2010 which sets the market context for bank losses and provides an overview of the tax treatment of such losses in 17 OECD countries; describes the tax risks that arise in relation to bank losses from the perspective of both banks and revenue bodies; outlines the incentives that give rise to those risks; and describes the tools revenue bodies have to manage these potential compliance risks. It concludes with recommendations for revenue bodies and for banks on how risks involving bank losses can best be managed and reduced. Although the report deals primarily with the tax treatment of banks which have suffered overall losses, it also touches on issues which are relevant to write-downs and write-offs which may reduce a banks profits. The report deals specifically with the banking sector, but similar issues may also arise in other sectors. Tackling Aggressive Tax Planning through Improved Transparency and Disclosure Countries have developed a number of strategies to deal with aggressive tax planning. The underpinning of any such strategy is
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to ensure the availability of timely, targeted and comprehensive information, which traditional audits alone can no longer deliver. The availability of such information is important to allow governments to identify risk areas in a timely manner and be able to quickly decide whether and how to respond, thus providing increased certainty to taxpayers. To be effective, tax administrations are moving closer to working in real time. Several countries have therefore introduced complementary disclosure initiatives aimed at improving their capability to identify and quickly respond to aggressive tax planning. This report shows how countries are doing this tackling aggressive tax planning through improved transparency and disclosure. It covers a range of approaches from mandatory disclosure rules to forms of co-operative compliance. The report provides a toolkit for those concerned with aggressive tax planning and recommends a careful review of the different approaches to inform both tax policy and compliance. The report concludes that disclosure initiatives can help fill the gap between the creation/promotion of aggressive tax planning schemes and their identification by the authorities, therefore enabling governments to proceed immediately to an assessment of the issue and its resolution. Such early detection and resolution benefits both the taxpayer and governments, including in terms of fewer routine audits, increased transparency and a positive impact on compliance culture in general. For instance, based on its disclosure rules for tax avoidance transactions, the United Kingdom was able to cut off GBP 12 billion in avoidance opportunities. Corporate Loss Utilisation through Aggressive Tax Planning Due to the recent financial and economic crisis, global corporate losses have increased significantly. Numbers at stake are vast, with loss carry-forwards as high as 25% of GDP in some countries. Though most of these claims are justified, some corporations find loop-holes and use aggressive tax planning to avoid taxes in ways that are not within the spirit
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of the law. Working co operatively, countries can deter, detect and respond to aggressive tax planning while at the same time ensuring certainty and predictability for compliant taxpayers. This report, published in August 2011, looks at a number of commonly used schemes and identifies three key risk areas: corporate reorganisations, financial instruments and non-arms length transfer pricing. Though these are generally used for sound business and economic reasons, some taxpayers use them to obtain undue tax advantages. For example, countries have identified financial instruments that create artificial losses or obtain multiple deductions for the same loss. They have also seen loss-making companies acquired solely to be merged with profit-making companies and loss-making financial assets artificially allocated to high-tax jurisdictions through non arms length transactions. The report outlines strategies to detect and respond to these aggressive tax planning schemes. Detection usually takes place through audits, special reporting obligations on losses, mandatory disclosure rules, rulings, and co-operative compliance programmes. Responses require a comprehensive approach focusing on aggressive tax planning schemes, as well as on their promoters and users. Early engagement between taxpayers and tax authorities in the framework of disclosure initiatives and co-operative compliance programmes also has positive effects, convincing some taxpayers not to use or promote certain schemes. Through the OECD, countries share intelligence on aggressive tax planning schemes and increase international co-operation on detection, responses, and evaluation. Governments should also introduce policies to restrict the multiple use of the same loss and to introduce or revise restrictions on the use of certain losses in the context of mergers, acquisitions, or group taxation regimes. Finally, the report identifies emerging threats for tax revenue, such as aggressive tax planning schemes based on after-tax hedges, and suggests that countries analyse the policy and compliance issues related to them.
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Hybrid Mismatch Arrangements: Tax Policy and Compliance Issues Untaxed income, multiple deductions and other forms of international tax arbitrage are a growing concern for governments. Anecdotal evidence shows that billions of dollars in tax revenues are at stake. New Zealand settled cases involving 4 banks for a combined sum exceeding NZD 2.2 billion. Italy recently settled a dozen cases involving hybrids for an amount of approximately EUR 1.5 billion. In the United States, the amount of tax evaded in 11 foreign tax credit generator transactions has been estimated at USD 3.5 billion. This report describes the most common types of hybrid mismatch arrangements (i.e. arrangements exploiting differences in the tax treatment of instruments, entities or transfers between two or more countries) and the effects they aim to achieve. It summarises the tax policy issues raised by these arrangements and describes the policy options to address them, with a focus on domestic law rules which deny benefits in the case of hybrid mismatch arrangements and countries experiences regarding their application. The report concludes that these arrangements generate significant policy issues in terms of tax revenue, competition, economic efficiency, fairness and transparency. It notes that that the same concern that exists in relation to distortions caused by double taxation exists in relation to unintended double non-taxation and recommends a number of actions to be undertaken.
ATP Workshops
Enhanced relationship in the banking sector - Rome The workshop was organised by Agenzia delle entrate (Italian Revenue Agency), in co-operation with the Italian Banking Association, AIBE (Italian Association of Foreign Banks) and the OECD Centre for Tax Policy and Administration. Officials from
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Disclosure and transparency lie at the heart of the UKs efforts to tackle tax avoidance with a view to ensuring that the small minority of taxpayers engaging in tax avoidance are no longer able to shift the burden of taxation onto compliant taxpayers. At the same time, they contribute to provide very much needed early certainty to taxpayers.
David Gauke MP, UK Exchequer Secretary to the Treasury revenue bodies, the banking sector and OECD met in Rome on 10-11 October 2011 to discuss ways to enhance the relationship between tax administrations and the banking industry and thus improve tax compliance. Participants to the seminar Developing the enhanced relationship in the banking sector agreed on the need to strengthen co-operation among revenue bodies and the banking sector. Their discussions were based upon the experience of countries which have already implemented a new co-operative approach. The seminar addressed the role of banks in the current economic environment, the impact of recent regulatory changes on tax matters, and the experience of various stakeholders with co-operative compliance programmes. It also addressed issues such as those related to bank losses and how to determine the appropriate tax treatment of branches of foreign banks. The Italian tax authorities and the national banking association announced that they will soon develop a code of tax practice for Italian banks, along the lines of that recently endorsed by the OECD Forum on Tax Administration.
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Developing the enhanced relationship in the banking sector, 10-11 October 2011, Rome, Italy.
Key events Workshop on Hybrid Mismatch Arrangements, Montreal, 8-10 May 2012. Key publications Hybrid Mismatch Arrangements: Tax Policy and Compliance Issues, March 2012. Corporate Loss Utilisation through Aggressive Tax Planning, August 2011. Tackling Aggressive Tax Planning through Improved Transparency and Disclosure, February 2011. Addressing Tax Risks Involving Bank Losses, September 2010.
Aggressive Tax Planning on the Web www.oecd.org/tax/atp
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Did you know that the work ATP Steering Group helped
Italy to settle a number of cases involving aggressive tax planning for approximately EUR 1.5 billion? and that the UK was able to cut off GBP 12 billion in avoidance opportunities through its mandatory disclosure rules?
Did you know that in some countries carry-forwards are

as high as 25% of GDP?
Did you know that about a dozen countries have

changed or proposed to change their rules on the tax treatment losses changed after the publication of the report Corporate Loss Utilisation through Aggressive Tax Planning?
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developing a global partnership
Developing a Global Partnership

The recent strengthening of the Global Forum on Transparency and Exchange of Information for Tax Purposes, the creation of the African Tax Administration Forum (ATAF), the launch of the Latin American and Caribbean Programme, as well as the intensification of CTPAs ASEAN programme all reflect the increasing importance of international co-operation to reinforce countries tax systems and to promote economic growth and development. Global Relations will continue to seek to strengthen our partnership with other international organisations working in the tax area.
Richard Parry, Head of Global Relations Division, Centre for Tax Policy and Administration The OECD engages with a large number of economies outside its current membership. In the tax area, the fragile global economic recovery makes fiscal sustainability imperative, and structural tax reforms are essential to promote sustainable growth and poverty reduction (for more information, see Hot Topic: The Role of Tax for Development). Further, globalisation increases the importance, to both governments and business, of developing and implementing internationally accepted principles of taxation and standards for the administration of taxation systems. In short, there is a need for a consistent approach to international taxation issues, and for a truly global dialogue. The CTPAs Global Relations Programme acts as a bridge between OECD member countries and partner countries outside the OECD to facilitate the implementation of effective and efficient tax systems as a critical platform for development, as well as to ensure that non-OECD economies have a voice in developing international tax standards and guidelines so that these continue to be of wide
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relevance and practical use to all in an increasingly interdependent global economy. This means: Listening to non-OECD economies, understanding their perspectives and ensuring OECD approaches reflect the reality of non-OECD economies circumstances; Promoting OECD standards and guidelines, and good practices in the international tax area.
Key Partnerships
The membership discussions launched by the OECD in 2007 with Chile, Estonia, Israel, Russia and Slovenia have resulted in the most significant enlargement in the OECDs 50 year history. In 2010, Chile, Slovenia, Israel and Estonia became OECD members and good progress continues to be made in the Russian accession process. OECD countries are strengthening key partnerships with Brazil, China, India, Indonesia and South Africa as well as engaging more directly with countries in the ASEAN region. The CTPA has established close links with the tax administrations and Ministries of Finance in these key countries, involving them in the CFAs work processes and engaging them in the wider international dialogue and experience-sharing in the tax area (China, India and South Africa are already observers). The extent of this engagement is well demonstrated by the case of China: China is Vice-Chair of the Global Forum on Transparency and Exchange of Information in Tax Matters, and a member of the GFTEOI Steering Group and the Peer Review Group, the Forum on Tax Administration, and the Advisory Group for Co-operation with NOEs which brings together OECD members, and representatives from key emerging and developing economies. China also plays an important leadership role as Vice Chair of WP10, on Exchange of Information, and will play an important role in the Steering Group of the new Global Forum on Transfer Pricing.
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On 6 April 2012, the CTPA management team met the SAT (State Administration for Tax) in Beijing where the full range of engagement was discussed and plans made for future co-operation. This event in Beijing illustrated how close the relationship between the CTPA and China is and the CFA is considering a clearer form of engagement than observership which does not reflect the reality of Chinas role (or the role of India, South Africa and Argentina).
CTPA management teams visit to the Chinese State Administration of Taxation (SAT), Beijing, China, 6 April 2012 - (Left/Right) Marlies de Ruiter, OECD; Achim Pross, OECD; Monica Bhatia, OECD; Pascal Saint-Amans, OECD; Wang Li, Deputy Commissioner, SAT; Grace Perez-Navarro, OECD; Bert Brys, OECD; Richard Parry, OECD; Liao Tizhong, Deputy Director General of the International Taxation Department, SAT.
The Global Relations Programme in Taxation

The Global relations programme celebrates its 20th anniversary in 2012, working directly with more than 35 000 tax officials in that time on a vast range of topics. The programme has formed the bedrock for engagement and provided the pre-condition for the successful accession process moving towards completion as well as the engagement of key countries such as China and India. It also
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provides the basis for the successful development of Global Fora including the Global Forum on Transfer Pricing launched in 2012 with over 90 countries all of whom are currently engaged in the programme. In practice, the programme develops partnerships between tax officials in OECD member countries and non-OECD economies, as well as experts from the OECD Secretariat, to share practical experience and expertise on a wide range of taxation issues. It solves problems, shares perspectives on a South-South basis and provides a valuable opportunity for non-OECD economies to contribute their own perspectives. The Global Relations Programme promotes international
co-operation on all the core work areas of the CFA, including transfer pricing, exchange of information, tax Treaties, consumption taxes, domestic tax policy and revenue administration. The programme has global reach through OECD multilateral tax centres in Austria, Hungary, Korea, Mexico and Turkey and numerous hosting partners in Africa, Europe, Asia, CIS (Commonwealth of Independent States) countries, the Middle East and Latin America. By bringing together high level experts from member and nonOECD governments through more than 75 week long events per year, and directly engaging more than 2 000 tax officials from over 100 countries, the programme provides the platform for a truly global dialogue on taxation.
Developing a Global Partnership

Mobilisation of domestic resources is essential for development. To strengthen tax administrations in developing countries the OECD partners with donors and other International Organisations to enrich knowledge sharing and policy dialogue. We achieve this by working together in the Global Forum on Transparency and Exchange
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Pravin Gordhan, South African Minister of Finance at the OECD 1 March 2011 - (left/right ) Gabriela Ramos, Chief of Staff of the Secretary-General; Pravin Gordhan, South African Minister of Finance; Richard Boucher, Deputy Secretary-General of the OECD. OECD, Paris, France.
of Information for Tax Purposes, through co-operation with the UN, World Bank, IMF, ATAF, CIAT, IOTA, CATA, ATAIC, and other international organisations, through OECD regional programmes like the Latin American and Caribbean Programme (LAC), Middle East and North Africa (MENA) and the ASEAN programme. In addition, recognising the role that taxation plays in building successful states and in economic and social development, the CTPA is building a stronger relationship with the OECDs Development Assistance Committee and aid agencies and donors. Increased global demands and generous support from voluntary contributions from interested countries mean that in addition to our significant work in the ASEAN region and our increased collaboration with ATAF, we are increasing activities and providing assistance to developing countries in Latin America, Africa and Asia, supporting the work of the G-20 through the Task Force on Tax and Development.
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Delivery
The programme benefits from direct input from an Advisory Group made up primarily of non-OECD economies, which enables it to be strongly demand driven, while building on the work of and feeding partner perspectives into the working parties themselves, benefiting from the two way street of interaction between tax officials with deep specialist knowledge and expertise. Further Information The Global Relations website includes the information about events, how to participate, annual reports, and other relevant information for anyone who is directly or indirectly involved with the OECDs programme of co-operation with NOEs. For more information, contact Richard.Parry@oecd.org Significant Upcoming Events High Level event with China on Transfer Pricing, November 2012. High Level event with India on Countering Aggressive Tax Planning, November 2012. Global Relations on the Web www.oecd.org/tax/globalrelations
Did you know The Committee on Fiscal Affairs has invited the United Nations to become an observer to the Committee and its subsidiary bodies. This will strengthen the position of both organisations in our efforts to meet demand for global standards, guidelines and best practices. By participating as observers the UN will have access to all the documents and work in progress in the OECD and having a UN perspective in our discussions will be of considerable benefit to the work of the OECD (Pascal Saint-Amans)
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network on fiscal relations across levels of governments
Network on Fiscal Relations across Levels of Governments
The OECD Network on Fiscal Relations across Levels of Government provides countries with cross-country analytical and statistical analysis on financial relations among central, regional and local governments are organised. With decentralisation issues becoming higher on the political agenda in most OECD countries, the Network has established itself as a high level, multidisciplinary platform for policy dialogue, between policy makers for taxation and expenditure. The Network is serviced jointly by three OECD Directorates: the Centre for Tax Policy and Administration (CTP), the Economics Department (ECO) and the Directorate for Public Governance and Territorial Development (GOV) and gathers delegates from different national ministries (Department of Budget, Department of Tax, Ministry of Economy and Finance, Ministry of Interior, etc). This horizontal approach has been found valuable by all participants. The following sections provide an overview of recent activities of the Network and how it contributes to a better understanding of tax and spending policy in a multi-level environment.
Reforming Fiscal Federalism and Local Government

How to successfully reform intergovernmental fiscal frameworks when the latter concern the founding principles of a country? In February 2012, the Fiscal Network published a book on how fiscal federalism reforms can succeed. The book analyses, among others, sub-central tax reforms, equalisation reforms, the introduction or strengthening of sub-central budget rules or amendments to intergovernmental transfers system. Ten country studies following a unified approach plus a summary chapter describe the success factors, but also the formidable obstacles that were to overcome before reforms were adopted. Detailed insights into the reform
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process and the political, economic and financial conditions in each country make for fascinating reading for both reform insiders and outsiders. The publication suggests that even far-reaching fiscal federalism reforms can potentially be brought through once policymakers adhere to a few basic rules of the political economy of reform.
Sub-central tax competition

Is tax competition beneficial or harmful? Tax competition arises from sub-central governments seeking to attract and retain investment and mobile tax bases. The views on the merits of tax competition differ widely: while some consider that tax competition brings subcentral fiscal policy closer to citizens preferences, increases the efficiency of the public sector and avoids tax excesses, others argue that tax competition leads to a distorted tax structure, to growing tax disparities and to an under-provision of publicly provided services. The recent working paper of the Fiscal Network provides insight into how tax competition works, and on how its outcomes depend on the sub-central tax mix and the wider institutional set-up of a country. It also provides guidance for policymakers: while they should widen sub-central tax autonomy, they should shift the sub-central tax mix towards property taxation, and they should ensure that adequate equalisation allows for decent public service standards over the country.
Fiscal consolidation at the sub-central level

This ongoing project describes the current fiscal positions and future consolidation needs for sub-central governments, assuming various scenarios. While in most countries the sub-central level is less indebted than central government, in a few countries state and local debt has likely reached unsustainable levels. Also, with central government pursuing fiscal austerity further, sub-central
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network on fiscal relations across levels of governments
Autonomous taxes by tax type, as percent of total SCG tax revenue

I Others 110 100 90 80 70 60 50 40 30 20 10 0
United States Switzerland Australia Mexico Belgium Canada Spain Italy Austria Germany Australia Mexico United Kingdom Israel Slovak Republic Czech Republic Belgium New Zealand Switzerland Canada Norway Denmark Sweden Netherlands Luxembourg Iceland Finland Portugal Japan Italy Korea Hungary Spain France Germany Poland Chile Austria Slovenia Estonia United States 1 Municipalities
I Property
I PIT
I Consumption
I CIT
States/regions
1) Local governments in the United States show a wide variety of taxing powers but it is not possible to identify the share of each.
governments will have to cope with lower transfer revenues, increasing the pressure to cut back further on spending and/or to increase own tax revenue. The project will be finalised by spring 2013.
Recent Publications Blchliger, H. and C. Vammalle (2012): Reforming Fiscal Federalism and Local Government: beyond the Zero-Sum Game, OECD Publishing, Paris. WP 13: Tax competition between sub-central governments. WP 12: Fiscal policy across levels of government in times of crisis, Mar-2010.
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WP 11: Explaining the Sub-National Tax-Grants Balance in OECD Countries, Jan-2010. WP 10: Finding the Dividing Line between Tax Sharing and Grants: A Statistical Investigation, Jun-2009. WP 9: The Fiscal Autonomy of Sub-Central Governments: An Update, Jun-2009. WP 8: The Spending Power of Sub-Central Governments: A Pilot Study, May-2009. WP 7: Taxes and Grants: On the Revenue Mix of Sub-Central Governments, May-2009. Fiscal Network Statistics on the Web www.oecd.org/ctp/federalism OECD Fiscal Decentralisation Database: www.oecd.org/ctp/federalism/stats
Did you know that tax autonomy of sub-central

governments is often smaller in federal than in unitary countries?
Did you know that in a few countries municipalities and

regions/states are more heavily indebted than central government?
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international tax dialogue
International Tax Dialogue
The 4th ITD Global Conference was held in India on 7-9 December 2011. The theme of the conference was Tax and Inequality which is now at the centre of political debate, and all countries are taking different actions to address it. Increasing inequality can impact far beyond its immediate economic implications, raising a number of political and ethical questions which have wide-ranging consequences for the future of all societies. The conference tried to identify which tax policies that have succeeded, those which failed, and those which could play a greater role in reducing inequalities in the future whilst sustaining economic growth. More than 350 senior tax policymakers and administrators from 93 countries, and all the main international organisations with an interest in tax, participated at this event hosted by the Finance
Welcome address and opening panel (from left to right): Wang Jun Vice-Minister of Finance, China; Min Zhu Deputy Managing Director, IMF; Pranab Mukherjee Minister of Finance, India; S.S. Palanimanickam Minister of State for Finance, India; N.N. Meena Minister of State for Finance, India.
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Ministry of India and organised by the International Tax Dialogue (ITD). The conference was seen as an important focus for debate in this area. Participants ranked it very highly in terms of satisfaction and relevant to their work. Follow up at the regional level is planned. The ITD has organised a follow up conference in the MENA region, to be hosted by the Tunisian Government, on Better Governance and Fair Taxation on 30-31 May 2012 which will build on the discussions that took place in Delhi. The ITD and its partners will also participate in follow up discussions at events in other regions in 2012. Preparations for the next ITD global conference to be held in 2013 have already started and the topic and location will be announced during 2012. The ITD hosts a website that enables countries and organisations to share information on important developments, good practices, reviews, new strategies and approaches. Statistics show that site use measured by both the number of pages viewed and the number of countries which visited it continued to improve compared to the previous year. The total number of documents increased as well, amounting to approximately 3150. The ITD website also makes information available about technical assistance activities in the tax area taking place globally. All countries are encouraged to make a contribution to this global knowledge sharing initiative by ensuring key documents are added to the site. Success of the site lies in the quality of information countries are prepared to share. To become a contributing country/organisation, please contact the ITD Secretariat which is ready to create new gatekeeper accounts and to offer training and assistance with the content administration site.
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international tax dialogue
The International Tax Dialogue is a collaborative arrangement involving the EC, IDB, IMF, OECD, World Bank Group and CIAT to encourage and facilitate discussion of tax matters among national tax officials, international organisations, and a range of other key stakeholders. The ITD Secretariat is currently hosted by the OECD. Information on the work of the ITD, its conferences, technical assistance activities by its members, and access to a large collection of tax documentation of interest to tax policymakers and administrators is available online at www.itdweb.org.
Did you know that the ITD database of Technical

Assistance Activities has currently 1611 items categorised by provider, location, topics, intended audience, type of activity and dates. This database currently includes information on activities provided by all ITD partners (IMF, WB, OECD, EC, IDB and DIFID), CIAT and USAID, and it is updated on regular basis.
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CTPA Management Team
Global Relations Division (BCNOE, Advisory Group) CTP/GR Richard Parry, Head of Division Accession, Enhanced Engagement & NOE Programmes Tax and Development Programme International Tax Dialogue Unit
Tax Policy and Statistics Division (WP2 & WP9) CTP/TPS Stephen Matthews, Head of Division Business and International Tax Personal and Property Taxes Tax and the Environment Consumption Taxes Tax Data, Statistics and Indicators Fiscal Network
Directors Office Pascal Saint-Amans, Director
Grace Perez-Navarro, Deputy Director Tax Treaty, Transfer Pricing & Financial Transactions Division (WP1 & WP6) CTP/TTP Marlies de Ruiter, Head of Division Tax Treaties Unit Transfer Pricing Unit Global Forum on Transparency & Exchange of Information for Tax Purposes CTP/GF Monica Bhatia, Head of Division Review Unit I Review Unit II
International Cooperation and Tax Administration Division (FTA, WP8 & FHP) CTP/ICA Achim Pross, Head of Division Tax Administration Unit International Cooperation Unit Non compliance Unit FHP Unit TRACE Unit
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want to know more?
Want to Know More?
Key Links Consumption tax: www.oecd.org/ctp/ct Dispute resolution: www.oecd.org/ctp/dr Exchange of information: www.oecd.org/tax/eoi Harmful tax practices: www.oecd.org/ctp/htp Global Forum on transparency and exchange of information for tax purposes: www.oecd.org/tax/transparency OECD tax database: www.oecd.org/ctp/taxdatabase Partnerships with non-OECD economies: www.oecd.org/tax/ globalrelations Forum onTax Administration: www.oecd.org/tax/fta Tax crimes and money laundering: www.oecd.org/ctp/taxcrimes Tax evasion: www.oecd.org/tax/evasion Tax policy analysis: www.oecd.org/ctp/tpa Treaty Relief and Compliance Enhancement: www.oecd.org/tax/ trace Transfer pricing: www.oecd.org/ctp/tp Tax treaties: www.oecd.org/ctp/tt Tax treatment of bribes: www.oecd.org/ctp/ttb Aggressive Tax Planning: www.oecd.org/tax/atp and more on www.oecd.org/tax
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Key Publications Consumption Tax Trends 2012 (2012) Revenue Statistics 1965-2010, 2011 Edition (2012) Taxing Wages 2011 (2012) Hybrid Mismatch Arrangements: Tax Policy and Compliance Issues (2012) Reforming Fiscal Federalism and Local Government: Beyond the zero-sum game (2012) Dealing Effectively with the Challenges of Transfer Pricing (2012) Inventory of Estimated Budgetary Support and Tax Expenditure for Fossil Fuels (2012) Revenue Statistics in Latin America (2012) OECD Tax Policy Study No. 21: Taxation and Employment (2011) The Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol (2011) Global Forum on Transparency and Exchange of Information for Tax Purposes, peer reviews (2011 & 2012) Corporate Loss Utilisation through Aggressive Tax Planning (2011)
Key Events Global Forum on Transparency and Exchange of Information, Cape Town, 25-27 October 2012 Global Forum on Tax Treaties, Paris, 27-28 September 2012 Second LAC Tax Policy Forum, Bogot, Colombia, 13-14 July 2012 Second Annual Forum on Tax and Crime, Rome, Italy, 14-15 June 2012
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want to know more?
OECD-USCIB International Tax Conference, Washington D.C., USA, 4-5 June 2012 Taskforce on Tax and Development, Cape Town, South Africa, 9-10 May 2012 First Annual International Meeting on Transfer Pricing , Paris, 26-27 March 2012 Fourth ITD Global Conference: Tax and Inequality, New Delhi, 7-9 December 2011 Global Forum on Transparency and Exchange of Information for Tax Purposes, Paris, 25-26 October 2011 16th Annual International Meeting on Tax Treaties, Paris, 15-16 September 2011 OECD 50th Anniversary Conference: Challenges in Designing Competitive Tax Systems, Paris, France, 30 June 2011
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Tax News Alerts

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OECD Centre for Tax Policy and Administration 2, rue Andr Pascal 75775 Paris Cedex 16 FRANCE
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The Centre for Tax Policy and Administration offers challenging and rewarding opportunities to economists, lawyers and tax administrators with experience in tax policy or tax administration issues of the type described in this brochure. Vacancies are posted on www.oecd.org/hrm/vacancies
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OECD Current Tax Agenda 2012

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OECDs Current Tax Agenda

Oslo Dialogue: A Whole of Government Approach to Fighting Financial Crime 71

CTPA Management Team Want to Know More?

oecds current tax agenda

The OECD: What Is It?

the oecd: what is it?

OECD member countries

Did you know the Russian Federation is advancing in its

Did you know Brazil, the Peoples Republic of China,

oecds current tax agenda

How is the OECD organised?

Committees Discussion and implementation

Secretariat Analysis and proposals

Council and Committees

the oecd: what is it?

The OECDs core values

the committee on fiscal affairs

The Committee on Fiscal Affairs

oecds current tax agenda

the committee on fiscal affairs

oecds current tax agenda

the committee on fiscal affairs

oecds current tax agenda

Mandate of the Committee on Fiscal Affairs

the committee on fiscal affairs

oecds current tax agenda

the centre for tax policy and administration

The Centre for Tax Policy and Administration

Administration is recognised worldwide

oecds current tax agenda

Working with Non-OECD Economies

Working with Business and Civil Society

the centre for tax policy and administration

overnments and business continue to face ongoing major challenges. The

oecds current tax agenda

Tax and Inequality

Transfer Pricing Simplification Exchange of Information

the role of tax for development

The Role of Tax for Development

he African Tax Administration Forum (ATAF) is founded on two important

oecds current tax agenda

Focus on Domestic Resource Mobilisation in Africa

the role of tax for development

Domestic Resource Mobilisation in Africa

What Needs to be Done to Strengthen Domestic Resources?

oecds current tax agenda

the role of tax for development

Key Facts on Tax Incentives for Investment:

oecds current tax agenda

Estimates of Official Development Assistance Aimed at Supporting Tax Systems 2004-2010*

Source: OECD * Does not include IMF

The Role of the Informal Task Force on Tax and Development

the role of tax for development

oecds current tax agenda

the role of tax for development

oecds current tax agenda

the role of tax for development

oecds current tax agenda

tax and inequality

Tax and Inequality

oecds current tax agenda

Gini Coefficients: Selected Countries (Decade of 2000)

tax and inequality

oecds current tax agenda