Well done, Singapore…

By Global Tax Weekly

…for suggesting that the OECD’s focus with its BEPS project is almost entirely focused on “harmful” tax practices to the point where the beneficial ones have been forgotten about. It sounds – in the spirit of one of John Cleese’s characters again – like stating the bleedin’ obvious, but it’s about time somebody did. Of course, from the OECD’s point of view, I suppose that’s the whole ethos of The Project: the elimination of tax competition. Not that you’ll hear such an admission from the mouth of Angel Gurria or the finance ministers of the OECD governments who regularly praise the work of the OECD without ever seeming to question it. If they ever did stop to think what they are about to unleash on the world, perhaps they might begin to have second thoughts. Then again, politicians generally are incapable of thinking beyond the next election and will say whatever needs to be said to attract the necessary number of votes from the necessary demographic groups. How else do you explain something as ill-conceived as the UK’s Diverted Profits Tax, rushed through to take effect just a month before the general election? Indeed, numerous studies suggest that governments all over the world, despite their routine pro-BEPS platitudes, are already fatally undermining the Project by legislating before it’s even finished. As the European Centre for International Political Economy succinctly concluded in a critique of the OECD’s plans to ensure proper taxation of the digital economy (which, it pointed out, contradict much of what the OECD stands for, i.e. free trade and technological progress), the way things are shaping up, the cure could be worse than the disease.

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