Filled With Jargon, Official-Speak And Complex Tax Concepts

By Global Tax Weekly

Apparently, the numerous consultations that the OECD undertook with businesses and other stakeholders as part of the BEPS project generated some 12,000 pages of comment. I do wonder, however, how much of this verbiage the OECD actually took on board when formulating the final BEPS reports, which were announced, in that most modern of ways, via a webcast from OECD HQ in Paris, on October 5.

In reality, the content of the 15 reports, filled as they are with jargon, official-speak and complex tax concepts, is what most of us were expecting. What’s really quite worrying me is that the OECD seems to be utterly in denial that the BEPS recommendations, when (and if) implemented, could do any harm to businesses, investment, and economies. Indeed, I was astonished to hear Saint-Amans admit in his presentation that more double taxation is going to be inevitable, at least in the early phases of implementation of the BEPS measures. But he said it would be worth it in the long run because we will have a better tax system overall. Hmm. That will depend, of course, on 200 countries interpreting and implementing the proposals in the same way. And let’s hope that some of them don’t jump the gun. What’s that? They already have? Oh dear.

So why is it that the OECD doesn’t appear to be taking the concerns of businesses seriously? In my view, it’s probably because the authors of the reports aren’t business people themselves. Take a look at Saint-Amans’s resume for example. After graduating from France’s National School of Administration in 1996, he spent almost 10 years as an official in the French Finance Ministry where he oversaw legislation and policy on wealth tax, headed up tax treaty negotiations and mutual agreement procedures, participated in and chaired the OECD Working Party No. 1 of the Committee on Fiscal Affairs, and served as Deputy Director in charge of litigation at the Direction Générale des Impôts. He joined the OECD in September 2007 as Head of the International Co-operation and Tax Competition Division before becoming Director of the Center for Tax Policy and Administration in February 2012. In other words, he’s a career bureaucrat. And judging by his previous jobs, he might know an awful lot about tax administration, but it looks like he’s never been near a business in his life, at least from the point of view of forming one, running one, or even working for one.

Sure, the time has come for some kind of new contract between multinationals and governments with regards to tax — I get that — but it’s becoming all too obvious that not enough thought is being given by those driving the BEPS project to the economic consequences of its proposals. So how ironic would it be if, in the almost borderless age of digital innovation, governments conspire, as a result of BEPS, to effectively shut down parts of the world economy to investment. That’s not going to help foster growth and technological progress, especially in the developing world. And this is beginning at a time when the world economy is growing slower than at any time since the nadir of the financial crisis. Talk about shooting yourself in the foot!

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