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CAPACITY BUILDING
OECD Global Parliamentary Network
Varsha Singh Deputy Head of the Global Relations and Development DivisionCentre for Tax Policy & Administration, OECD
15 February 2018
What is Base Erosion and Profit Shifting (BEPS)?
• BEPS arises because under the existing rules MNEs are often able to artificially separate the allocation of their taxable profits from the jurisdictions in which these profits arise
• This can result in income going untaxed anywhere, and significantly reduces the corporate income tax paid by MNEs in the jurisdictions where they operate (thus affecting competition, distorting investment decisions and reducing overall trust in the tax system)
ILLEGAL LEGAL
Tax PlanningTax
AvoidanceTax Evasion
3
Overview of the BEPS Actions
Action 2Neutralise the effects of
hybrid mismatch arrangements
Action 3Strengthen CFC rules
Action 4Limit interest deductibility
Action 5Counter harmful tax practices
Action 6Prevent treaty abuse
Action 7Prevent the artificial
avoidance of PE status
Actions 8 - 10Aligning transfer pricing
outcomes with value creation:Intangibles;
Risk and capital; andOther high-risk transactions
Action 1Digital economy
Action 11Data analysis
Action 12Mandatory disclosure rules
Action 13Re-examine transfer pricing
documentation
Action 14Dispute resolution
Action 15Develop a multilateral
instrument
Minimumstandards
Reinforced international standards
Common approaches & best practices
Analytical reports & measuring BEPS
Coherence Substance Transparency
Objectives of the Inclusive Framework
Status of Inclusive Framework Membership
5
28%6%66%
128 Members of the Inclusive Framework
(125 as of 31 Dec 2018)
OECD
G20 (non OECD)
OTHER JURISDICTIONS
17%
15%
19%26%
23%
Regional balance
Africa
Asia-Pacific
Eastern Europe-CentralAsia
Americas (NorthAmerica, Latin America& Caribbean)Western Europe
Induction Programmes
6
Support to Parliamentarians
Induction programmes:• Regional events and stakeholder meetings on BEPS: Armenia, Georgia, Egypt
and Ukraine. • Bilateral meetings with parliamentarians: as part of high-level induction visits
on BEPS, e.g. in Burkina Faso, Côte d’Ivoire and Egypt.
A partnership with the Commonwealth Parliamentary Association (CPA):• Two year project with Public Accounts Committees (PAC)
• OECD partnerships with EC, ATAF and WBG
• 25 bilateral country programmes delivered in 2018
• Primarily focussed on transfer pricing and other BEPS issues (e.g. PE and interest deductibility)
• Significant impact in terms of legislative changes, organisational arrangements and increase in tax collection
Capacity Building: Bilateral Programmes
8
9
Event Leader
2 experts
6 Multilateral Tax Centres
Donors
Participants
KnowledgeSharing Platform
Global Relations Programme
Face-to-face
Blended learning
E-learning
• Further toolkits are expected to be released during the course of 2019.
Platform for Collaboration on Tax
Tax Inspectors Without Borders (TIWB)
• TIWB Secretariat annual report: Significant activity in 2017/18 towards meeting its objective to undertake 100 deployments by 2020.
• TIWB programmes:• 39 currently operational• 13 completed• 24 upcoming
• UNDP TIWB Roster of experts established in 2017
• Over USD 445 million in additional revenues to date
• Increased South-South co-operation in TIWB programmes
• Expanding TIWB: Pilot programme on Tax & Crime
12
TIWB: Senegal Experience
Tax Inspectors Without Borders – Case study Senegal
• Political will • Support legislation changes and ratification process• Building linkages to other tax reform efforts and
domestic synergies• Support from G20 members – pilot projects, expertise,
funding, encouragement to pilot countries• Sustained capacity building
Keys to success
13
THANK YOU