At a multilateral level, the OECD has been busy over the last few weeks on the base erosion and profit shifting front, and on December 23 released new tools for tax administrations to gauge how they are performing in the area of tax debt management and the reduction of compliance burdens.
It announced that it has developed new “maturity models,” featuring performance benchmarks against which tax agencies can better self-assess how their processes are performing against best standards and their peers.
Tom Boelaert, the Administrator General of the Belgian Debt Management Agency, which led the work on this model, explained that: “Tax debt management plays a crucial role in ensuring the effective and fair operation of the tax system. We should therefore always challenge ourselves to do better. Within my own agency, this new maturity model has facilitated frank and in-depth conversations … Read More »
Here’s a conundrum: How do you go about BEPSifying the entire global network of double tax avoidance treaties – or the majority of them at least – without testing out the theory that time is infinite? You use an instrument of course! By which I don’t mean you rewrite the world’s tax treaties using the power of song. This is the OECD’s BEPS Multilateral Instrument, which is considerably less entertaining. But more effective. Probably.
Given that the MLI went into effect on July 1, it’s too early to tell how the changes to be brought about will work in practice. But while it’s likely to shorten the global treaty reform process by several years, the process isn’t going to be an easy one by any stretch of the imagination.
Here’s the thing about the MLI: it’s not a one size fits all … Read More »
It is claimed that the BEPS project is a global initiative, built on a worldwide consensus of OECD and G20 members, and other key economies. That’s true to the extent that these countries are regularly heard to pay lip service to the work of the OECD in all its anti-tax avoidance endeavors. But when you look a little closer, there are stark similarities between the OECD’s work and Europe’s vision of what worldwide corporate taxation should look like. Perhaps this is not surprising, as, after all, the OECD and its 2,500-strong team of technocrats, administrators, and academics are based in Paris. Indeed, Pascal Saint-Amans, one of the main supervisors of the BEPS project, is a former French civil servant. And the fact that 25 of the 34 OECD member countries are in Europe will naturally give much of the OECD’s … Read More »
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 … Read More »
If the Volkswagen emissions scandal tells us anything, it’s that meeting ambitious emissions reductions targets is proving to be very testing (if you’ll pardon the pun). But governments are not helping themselves by continuing to subsidize fossil fuel usage to the tune of USD200bn annually in the form of tax breaks and spending programs, according to a recent report by the OECD. And this is just the combined total for the 34 OECD members and six key emerging economies. If we are to wean ourselves off our addiction to hydrocarbons, then clearly something very dramatic has to happen, and it has to happen soon, because the current hotchpotch of national energy policies clearly isn’t doing the trick. Something much more joined-up is required, but I don’t envisage that happening any time soon, Kyoto Protocol or no Kyoto Protocol. I don’t … Read More »
We begin with the dawn of the age of the intern, roughly thirty years ago, with the politicization of legislators and the final divorce of government from economic sanity. Ronald Reagan and Margaret Thatcher were the last two Western leaders who had any real grasp over the actual running of a country. The interns “disease,” as we may call it, was already biting hard, but it took until roughly 2000 before governments around the world had fallen mostly into the hands of a political class of “operators” who when they came into power naturally reached out to the “think-tanks” and the “multilaterals” such as the OECD for their policies, having none of their own. It is unfortunate, but may have been inevitable, that the period of “government by proxy” that ensued was one which saw a largely left-wing set of … Read More »