OECD Tax Forum Unites On Tough Compliance Stance
23 May 2013
Posted by: Author: Ulrika Lomas
Source: Ulrika Lomas, (Tax-News.com, Brussels)
Following the latest OECD Forum on Tax Administration (FTA) in Moscow, the heads of tax administrations from 45 economies underlined their commitment to coordinated action to improve the effectiveness of their tax administrations, and to tackle international tax fraud, tax evasion and aggressive tax planning.
In their final communiqué, the FTA member states noted that they have now developed tools to improve the gathering of information on cross-border financial transfers, to decode banking transactions, and to identify the beneficial owners of complex structures, and emphasized that they would work together to analyse the data.
Underlining the need for closer inter-agency cooperation to combat tax offences, the FTA members explained that they have identified particular synergies, in combating tax and customs evasion and avoidance, which they aim to "fully exploit."
Stressing the importance of increased transparency and the comprehensive exchange of information, the members announced plans to rapidly increase the use of the provisions of the greatly expanded network of agreements allowing for information exchange, and to ensure effective and secure use of information received under those agreements. Furthermore, the members said that they welcome the growing focus on automatic exchange of information and "strongly endorse the G20 call urging all jurisdictions to move towards exchanging information automatically, which is expected to be the standard; and to do so with their treaty partners as appropriate."
Alluding to the problem of base erosion and profit shifting, the FTA members noted:
"We welcome the OECD’s work on Base Erosion and Profit Shifting (BEPS) that will shortly propose a comprehensive action plan intended to modernize international tax instruments and standards to respond effectively to, and counter, BEPS, notably in the areas of international taxation, transfer pricing and the digital economy, in an effective and appropriate manner."
"We stand ready to ensure that any new instruments and standards are applied to maximum effect to eliminate double non-taxation. We will draw on the work of the OECD in the area of aggressive tax planning and its directory of schemes to improve compliance."
Finally, the group announced the fact that they have developed a framework of cooperative compliance for the large business segment, that provides a sustainable basis for a relationship based on transparency, justified trust and confidence between tax administrations and business. Recognizing the different needs of small- and medium-sized enterprises (SMEs), the group has also adapted the model of cooperative compliance to meet their needs, in particular by involving them in the design of the tax compliance process.
The Forum on Tax Administration is a body of the OECD that was set up in 2002 to promote dialogue between tax authorities and to identify best practices.
The FTA is formed by 45 countries: The 34 members of the OECD, six "participating" countries, and five "observer" countries.
In the wake of the global financial and economic crisis and the resulting need to find additional tax revenues with which to balance budgets, pressure has grown at international level to combat both tax avoidance and tax evasion, to ensure that the legitimate tax claims of jurisdictions are met. There are growing calls for decisions to be implemented that safeguard the rights of states to implement the tax policies that they need, in an environment of fair tax competition, guaranteeing a level playing field.