OECD Tax Talks #8 - 15 December 2017
•Download as PPTX, PDF•
2 likes•6,776 views
With a number of recent and upcoming developments in the OECD’s international tax work, we invite you to join experts from the Centre for Tax Policy and Administration for a live webcast. Topics will include: - Taxation of the digitalised economy. - BEPS – including progress on the Multilateral Instrument and the latest on mutual agreement procedures. - Tax policy – update on revenue statistics - Tax certainty and the latest on the International Compliance Assurance Programme. - Public discussion draft on mandatory disclosure rules.
Recommended
More Related Content
What's hot
What's hot (20)
Similar to OECD Tax Talks #8 - 15 December 2017
Similar to OECD Tax Talks #8 - 15 December 2017 (18)
More from OECDtax
More from OECDtax (20)
Recently uploaded
Recently uploaded (20)
OECD Tax Talks #8 - 15 December 2017
- 1. OECD TAX TALKS 15 December 2017 14:00 – 15:00 (CET) CENTRE FOR TAX POLICY AND ADMINISTRATION
- 2. Join the discussion Ask questions and comment throughout the webcast CTP.Contact@oecd.org #OECDTaxTalks 2
- 3. INTRODUCTION
- 4. A vibrant environment 4 US Tax Reform EU List Mandatory Disclosure Rules (EU and G7) Digital Economy Tax for Inclusive Growth Transparency – AEOI implementation
- 5. G20 update 5 Calendar • December 2017, Deputies meeting • March 2018, Finance Ministers • April 2018, Finance Ministers • July 2018, Finance Ministers • Nov/Dec, 2018 Leaders’ Summit Topics • Digital Economy • BEPS Implementation • Transparency (including update of list criteria) • Beneficial Ownership • Tax Certainty
- 6. Harmful Tax Practices • Preferential regimes: 2017 Progress Report (Oct. 2017) – 164 regimes identified, 99 require action including 80 in the process of being amended/abolished – IP regimes: 52 reviewed, 27 in the process of being amended. France and Italy harmful • Exchange of tax rulings: Peer review reports (Dec. 2017) – More than 10 000 rulings identified up to the end of 2016, over 6 500 exchanged 6
- 7. New dataviz • Interactive map with key indicators and outcomes of the OECD work on tax • EOIR, AEOI and BEPS • Close to 150 countries and jurisdictions covered • Visit: http://bit.ly/2B0lPdJ 7
- 8. Country-by-Country Reporting Status of implementation 8 • OECD news release next week: more than 1300 exchange relationships expected to be announced • Will also include updates on the status of implementation of CbCR • Around 60 jurisdictions now have implemented an obligation for UPEs to file CbC Reports commencing in 2016 or 2017 • Regular updates on our website: http://www.oecd.org/tax/automatic-exchange/country-specific- information-on-country-by-country-reporting- implementation.htm • US recently signed bilateral agreements with France and Jersey, with more under negotiation • 67 signatories to CbCR MCAA (Bulgaria and Monaco joined in November) • Extensive efforts to avoid / minimise any unnecessary local filing (eg. in cases where the Multilateral Convention is not yet in force for FY 2016 for some countries) • Recent changes: no local filing for FY 2016 in Turkey and Israel. Deadline for local filing extended (India)
- 9. 9 • Voluntary programme for multilateral cooperative risk assessment and assurance • Provides increased tax certainty for MNE groups and gives tax authorities assurance that any tax risks have been identified • Launch in Washington DC in January 2018 • Focus on TP and PE risk • 18 month timeframe for pilot • Learning outcomes will be incorporated into possible wider roll-out in the future Pilot commences in January 2018 with eight participating tax administrations and MNE groups headquartered in these countries Potential benefits include: • More effective use of information • More efficient use of resources • Faster and clearer route to tax certainty • Fewer disputes entering MAP Australia Italy Netherlands UK Canada Japan Spain US ICAP
- 10. Topics 1. Revenue Statistics 2. Tax challenges of the digitalised economy 3. Tax treaties and BEPS multilateral instrument 4. Mutual agreement procedures 5. Mandatory disclosure rules 10
- 12. The Revenue Statistics series • Detailed, comparative information on tax revenues • A tool for tax policy makers & administrators which allows comparisons across countries & over time • Main indicators: tax levels (tax-to-GDP ratio), tax structure (share of a tax in total taxation) • 78 countries in four annual publications: OECD, Africa, Asia & Pacific Countries, Latin America & the Caribbean 12
- 13. Revenue Statistics OECD • Released on 23 November • Average OECD tax-to-GDP ratio: 34.3% (2016) – A further increase from 34.0% in 2015 – Compares to 19.1% in Africa and 22.2% in LAC (2015) • Personal income taxes increased as a share of total tax revenue (to 24.4% in 2015) – Social security contributions & goods & service taxes decreased – Corporate income tax revenues stayed flat 13
- 14. Tax to GDP ratio, 2016 14 Tax to GDP ratios in 2016 (as % of GDP) OECD average 0 10 20 30 40 50 DNK FRA BEL FIN SWE ITA AUT HUN NLD GRC NOR DEU LUX SVN ISL EST PRT CZE POL ESP GBR SVK NZL CAN ISR JPN* LVA AUS* CHE KOR USA TUR IRL CHL MEX * Data for 2015
- 15. 0 10 20 30 40 50 60 70 80 90 100 Personal income tax Corporate income tax Social security contributions Property taxes Taxes on goods and services Other Tax structures, 2015 15 Tax structures in 2015 (as % of total tax revenue)
- 16. Trends in tax structures since the financial crisis 16 Cumulative percentage point change since 2007 (OECD average, % of total tax revenue) -3 -2 -1 0 1 2 3 2007 2008 2009 2010 2011 2012 2013 2014 2015 Financial crisis +1.2 Social Security Contributions +0.7 Personal income tax Financial crisisFinancial crisis + 0.5 Goods & services (incl. VAT) - 2.3 Corporate income tax +2.0 +0.5 +0.2 Financial crisisFinancial crisisFinancial crisis -2.4
- 17. DIGITAL ECONOMY
- 18. Task Force on the Digital Economy 18 January 2017: New TFDE mandate April 2017: TFDE meeting September 2017: Request for input November 2017: Public consultation December 2017: TFDE meeting April 2018 Delivery of the Interim Report
- 19. Public Consultation 19 • 53 written submissions in reply to the request for input • Public consultation meeting at the University of California (Berkeley) Over 100 people attended Webcast – more than 2500 views 19% 46% 20% 15% NGO/Civil society, Think Tank, Individuals Private Sector Businesses, Business Groups, Professional groups Law, Accounting and Consulting firms Academics and Universities Breakdown of submissions
- 20. Public consultation: key messages 20 1. PROBLEM DEFINITION Need to clarify the underlying issues to be addressed. BEPS or “broader tax challenges”? 2. BUSINESS MODELS Support for work on the impact of digitalisation on business models & value creation 3. BEPS IMPLEMENTATION Good progress on VAT, but consistent implementation needed. Evidence of MNEs responding to BEPS LONG-TERM SOLUTIONS Clear preference for long term multilateral solutions and the need to avoid ring-fencing INTERIM MEASURES Strong concerns around short term measures, e.g. distortions, double taxation
- 21. The Interim Report 21 1. BUSINESS MODELS Analysis of how digitalisation is affecting markets and business models 2. TAX POLICY DEVELOPMENTS Assessment of the impact of BEPS measures and overview of key measures already taken by countries 3. LONG-TERM SOLUTIONS This chapter will aim to establish a clear sense of direction for advancing action on long term solutions 4. INTERIM MEASURES This chapter will consider the advantages/ disadvantages of interim measures and will aim to minimise the harm 6. NEXT STEPS The report will set out a concrete roadmap for future work 5. TAX ADMINISTRATION This chapter looks at how digitalisation can help improve tax compliance
- 22. Next steps 22 January 2018 Inclusive Framework on BEPS March 2018 Task Force on Digital Economy meeting 19-20 April 2018 Presentation of interim report to G20 Finance Ministers
- 23. TAX TREATIES
- 24. Trending Tax Treaty Topics • Taxes covered by tax treaties • Nexus/thresholds under the Model Tax Convention • Tax certainty – Principal Purpose Test (PPT) – Identifying most common areas of tax dispute (other than transfer pricing) – MAP Arbitration • Action 6 peer review • Entry into force of the MLI 24
- 25. Model Tax Convention 25 • 2017 Update of the Model Tax Convention was adopted by the OECD Council on 21 November. • The PDF version of the condensed 2017 Model will be released next week. The print version should be available by 19 January 2018. • Includes all of the treaty-related BEPS measures, in both the Model and the Commentary. • Includes other non-BEPS changes to the Articles (e.g. international traffic) • Further guidance added to the Commentaries (including integration of pre-BEPS work on interpretation and application of the PE definition)
- 26. Entry into force of the MLI 26 • Ratification by 5 signatories required 1 2 3 4 5 MLI in force Austria Isle of Man
- 27. Matching Results – Provisional MLI Positions Tax Treaties that will be updated (total tax treaties covered = 1,136) Article 6 New Preamble 1 136 Article 7 Principal Purpose Test (PPT) 1 136 PPT + Simplified LOB > 40 Article 12 PE – Dependent agent > 170 Article 13 PE – Specific Activity Exemptions PE – Anti-Fragmentation > 240 > 360 Article 14 PE – Splitting-up of Contracts > 110 Article 16 Mutual Agreement Procedure > 1 100 Part VI Arbitration > 160
- 29. Progress of peer reviews Batch 1 and 2: •6 and 7 jurisdictions •Approved and published Batch 3: •8 jurisdictions •In progress •Approved by the FTA MAP Forum during December meeting Batch 4: •8 jurisdictions •To be launched 29 December •Taxpayer input requested by 22 December 29
- 30. Peer review – Second batch Main findings Prevention of disputes Roll-back of APAs is not possible in 2 jurisdictions (France and Italy) Access to MAP Several jurisdictions did not introduce a bilateral consultation or notification process before the end of the review period (France, Luxembourg) There is also an issue regarding access to MAP in cases where there was an audit settlement for one jurisdiction (Italy) Resolution of MAP cases Not all jurisdictions have adequate resources but many of them had recent reorganisations or an increase in staff (Austria, Germany, Italy, Luxembourg, Sweden) Implementation of MAP agreements Implementation of MAP agreements after a given period of time may be an issue in several jurisdictions 30 • All but one jurisdiction (Liechtenstein) needs to make considerable amendments to their tax treaties Treaty analysis •One jurisdiction did not publish MAP guidance and in several jurisdictions the guidance is not complete or not up- to-date MAP Guidance
- 32. Average time to close cases 32 Transfer pricing cases 33.5 months Other cases 26.5 months Cases started before 1 January 2016 Transfer pricing cases 2.5 months Other cases 1.5 months Cases started as from 1 January 2016 22.5 months on average All cases 0
- 33. Jurisdictions with most MAP cases in end inventory 33
- 34. Outcomes of cases closed in 2016 34
- 36. CRS Avoidance and Offshore Structures 36 Evidence of CRS avoidance and use of offshore structures to obscure beneficial ownership: • Public leaks, such as the ‘Panama’ and the ‘Paradise’ papers • Compliance activities of tax administrations • OECD’s CRS Disclosure Facility • Residence by investment and pension schemes actively promoted by advisors Bari Declaration (May 2017) calls on the OECD to look at ways to address CRS avoidance arrangements and offshore structures including consideration of model MDR inspired by the approach outlined in the BEPS Action 12 Report
- 37. MDR for CRS Avoidance Arrangements and Offshore Structures 37 What schemes to disclose? Who is required to disclose these schemes? When is disclosure required? Which information is required to be disclosed ? Where is disclosure required? CRS Avoidance Arrangements and Offshore Structures Promoters and Relevant Service Providers (Intermediaries) When scheme is made available for implementation or services are provided* Jurisdiction where intermediary has a taxable presence Information on scheme and users Disclosure backed up by: • Obligations on user of the scheme to disclose where intermediary is not required or not able to disclose • Exchange of relevant information between tax administrations
- 38. Stakeholder input 38 Interested parties are invited to send their comments on the consultation draft by 15 January 2018 Comments should be sent to: mandatorydisclosure@oecd.org All comments on this consultation draft will be made publicly available.
- 39. QUESTIONS?
- 40. Join the discussion Ask questions and comment throughout the webcast CTP.Contact@oecd.org #OECDTaxTalks 40
Editor's Notes
- Preferential regimes: Of the 164, 99 require action, 56 require no action, 9 are still under review Of the 99 that require action, some are abolished/amended already. 80 are in the process of being amended/abolished. IP regimes: 52 results. Harmful – France, and Italy for its grandfathered entrants with trademarks that entered after June 2016. 27 in the process of being amended. 13 not harmful. One potentially harmful (Turkey). 7 abolished, 1 under review, 1 disadvantaged areas regime Additional regimes will be reviewed e.g. new IF members Monitoring of regimes required each year e.g. substantial activities, potentially not actually harmful regimes Rulings: Almost 6 500 exchanges of information took place by 31 December 2016
- The Revenue Statistics series is one of the flagship series of the Centre for Tax Policy & Administration; for OECD countries, it has been published since the early 1970s It provides highly-detailed, comparative information on tax revenues according to a common classification structure It is used by tax policy makers and administrators as a key input into their decision making as it allows countries to benchmark themselves against others on a consistent basis The two main indicators are the tax-to-GDP ratio, which measures the tax level of an economy; and the tax structure, which considers the share of different tax types as a percentage of total tax revenue The series currently covers 78 countries across four regions: Latin America & the Caribbean, Africa, Asia and the Pacific, and the OECD. Coverage is being gradually expanded to other countries in the Latin America and the Caribbean, Africa, Asia and Pacific regions The regional series are produced by the CTPA and DEV, working in partnership with a number of regional organisations: ECLAC, CIAT and the IADB in LAC, AUC and ATAF in Africa, and ADB and PITAA in Asia-Pacific; and are supported by the EU. The publications are scattered across the year
- The most recent publication in the series was Revenue Statistics OECD, which came out on 23 November It showed that the average OECD tax-to-GDP ratio in 2016 was 34.3% of GDP, a further increase from 34.0% in 2015 This compares to the average of 19.1% in Africa and 22.2% in LAC in 2015. It also shows that personal tax revenues are becoming increasingly important as a share of the tax mix They increased to just under a quarter of all taxes in 2015, at 24.4% Commensurately, SSCs and goods and services taxes have decreased, from X to Y in 2015 Corporate income tax revenues stayed steady at 8.9% of total revenues in both years
- While the OECD average tax-to-GDP ratio in 2016 was 34.3% of GDP, there was a reasonable amount of variation between countries. The highest tax-to-GDP ratio was found in DNK, with FRA above 45%; the lowest was in MEX, which was the only OECD country with a ratio of less than 20%. 21 OECD countries are within 5 percentage points of the average; 7 are above this, and 7 are below this
- The tax structures of OECD countries also vary quite considerably. This graph divides OECD countries into three groups The first group, on the left, shows OECD countries who receive the greatest share of their tax revenues from income taxes – that is, both personal and corporate income taxes combined. In three countries, income taxes make up over 50% of the tax mix (DNK, AUS, NZL) In almost all OECD countries, except CHL, personal income taxes make up a larger share of tax revenues than corporate income taxes; CIT is also relatively more significant in MEX and KOR The second group of countries are those who raise the largest share of their taxation from SSCs, shown in green. These countries have comparably lower levels of income taxation as a share of total tax revenue. Finally, the third group of countries derive the largest proportion of their revenues from taxes on goods and services, which includes VAT as well as other taxes on goods and services (including sales taxes and excises)
- The trends of different taxes have diverged somewhat since the financial crisis in 2007 and 2008 (highlighted in blue on the graph, which shows the cumulative change in the share of different taxes from their starting point in 2007) There are three main trends: Social security contributions and goods & services taxes (the two top lines) both initially increased as a proportion of total tax revenue, but have been decreasing steadily since 2010 Personal income taxes, shown in the lighter blue, dipped initially following the crisis but have since been increasing steadily, and have more than regained their pre-crisis levels Corporate income tax revenues fell sharply during the crisis, and have remained relatively flat since (currently at 8.9% of total tax).
- The MLI will enter into force 3 months after the 5th country has deposited its instrument of ratification of the MLI. We now have 2 countries that have ratified the treaty and 3 more countries are expected to ratify by the end of the year. Which will bring the eif of the MLI early next year. After that, the MLI will enter into force for each countries once they have ratified.
- My team ran algorithms for you to identify the number of tax treaties that are likely to be updated by the MLI and, although those results are preliminary and the matches will only be definitive once countries have deposited their final list of reservations, we could see that the MLI has succeeded in implementing provisions that are part of the minimum standards. Other provisions are different because they are optional. However, the MLI will update several tax treaties at once. If we take arbitration, for example, more than 160 tax treaties will have an arbitration provision. The fact that arbitration was in the MLI increased the intake of countries and, hopefully, is paving the way to a broader adoption of arbitration by countries.