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___________________________________________________________________________
2015/SFOM13/018 Session: 4
Exchange of Information and Tackling Base Erosion and Profit Shifting
Purpose: Information Submitted by: OECD
13th Senior Finance Officials’ Meeting Bagac, Philippines
11-12 June 2015
APEC SFOM
SESSION 4:
ADVANCING FISCAL
TRANSPARENCY AND REFORMS
EXCHANGE OF
INFORMATION AND
TACKLING BASE EROSION
AND PROFIT SHIFTING
RICHARD PARRY, OECD
• Challenge of dealing with international tax
avoidance and evasion requires global co-
operation
• Countering BEPS and exchanging
information lie at heart of the new global
tax order; also action against tax crimes
• Role of countries in the APEC region in
taking forward the global agenda
2
Issues
The end of bank secrecy:
• G20 in 2009
• Restructure of Global Forum on Transparency and Exchange of Information for Tax Purposes – 126 jurisdictions subject to peer review and ratings on implementation of standard of exchange of information on request (EOIR)
• Result = significant improvement in transparency and EOIR around the world, including Asia, over last five years
• Impacts: transparency relevant in combating tax evasion, corruption, anti-money laundering and illicit financial flows
Age of Transparency
3
Benefits:
• A leap forward in addressing tax evasion
• Significant deterrent effect
• Reputation benefits: public confidence and integrity of the financial system
• Incremental change on top of FATCA: synergies and cost savings for financial institutions
• Opportunity for implementing domestic reporting
Automatic Exchange of Information
4
• Regional technical events (eg ADB in Manila in May 2015), in country co-operation.
• Encourage countries to join Global Forum, input into work and join instruments such as Multilateral Competent Authority Agreement
• Potential for peer learning: e.g. effective legislative frameworks, IT solutions, effective use of information received
• Ensuring developing countries can benefit: enormous potential for revenue gains; also important to make sure there are no places for tax evaders to hide
• OECD and Global Forum creating common solutions with support and engagement of the regions.
Co-operation
5
Asia-Pacific GF Membership
Australia
Brunei
China
Cook Islands
Hong Kong, China
India
Indonesia
Japan
Korea
Macao, China
Malaysia
Marshall Islands
Nauru
New Zealand
Niue
Philippines
Samoa
Singapore
VanuatuThis map is for illustrative purposes and is without prejudice to the status of
or sovereignty over any territory covered by this map.
7
The BEPS Project
Feb 2013
• Diagnosis: “Addressing Base Erosion and Profit Shifting”
July 2013
• 15 Actions: “Action Plan on Base Erosion and Profit Shifting”
Sep 2014
• First Set of Deliverables: 3 Reports (Digital Economy, Multilateral Instrument) and 4 Instruments (Hybrids, Treaty Abuse, TP Intangibles, TP Documentation and CBC Template)
Sep 2015
• Second Set of Deliverables: Action 3 (CFC rules), Action 4 (Interest), Action 5 (HTP), Action 7 (PE Avoidance), Action 8-10 (TP), Action 11 (Economic Analyses), Action 12 (MDR), Action 14 (MAP)
October 2015
• Completion and Final Deliverables: Completion of BEPS Project and delivery of all supplemental reports to the G20 Finance Ministers in late 2015
8
Strategy for a strengthened dialogue
BEPS Project – Engagement
with partner economies
• Next Regional Network Meetings Sept - Nov 2015
• Asia- Pacific Region
– Collaboration with SGATAR, ASEAN TF,
– Technical Committee on BEPS (planned for
September 2015)
• Toolkits: practical input from the Region
– 2015: Tax Incentives; TP comparability;
– 2016: Indirect transfer of assets; TP documentation;
Treaty negotiation
– 2017: Base eroding payments; profit shifting through
supply chains; assessing BEPS risks
Next steps in APEC region
9
• Third leg of countering avoidance and evasion
• Fight against evasion, money laundering and other crimes
• Enhanced inter-agency and international co-operation improving capacity to fight illicit flows
• Sharing their new skills and knowledge within their agencies
• Proposed regional academy to be launched by APEC, OECD and partners for benefit of region
10
Tax Crimes and a Regional Academy
• Support for EOI and AEOI work in Global Forum
• Direct engagement in BEPS work and particularly BEPS implementation by member countries
• Support for a possible APEC Tax Academy on tax crimes and other crimes.
11
Key issues for APEC region