By TIOL News Service

SEOUL, NOV 02, 2013: THE OECD’s Task Force on Tax and Development, which met here on Wednesday & Thursday, has welcomed international action to address Base Erosion and Profit Shifting (BEPS). It was agreed that developing countries must have a voice in the development of the work. To this end, a BEPS Africa group, under the leadership of the African Tax Administration Forum (ATAF) with the Centre de rencontre des administrations fiscales (CREDAF) would be formed as soon as possible. Regional information sharing and consultation events in Africa and Latin America will be held in early 2014. The OECD stands by to support this work. A meeting of the Task Force dedicated to this topic will be held in March 2014.

On the issue of Multinational Enterprise financial reporting it was noted that the Task Force work on the transparency benefits from the public registration of statutory accounts had led to progress on country by country reporting, particularly the work on a common template for the global allocation of profits being taken forward by the G-8, G-20 and OECD (Action 13 of the BEPS Action Plan). It was agreed that the Task Force has a valuable role in tracking international transparency developments, including in the European Commission (EC) plus business and civil society initiatives.

In direct support of BEPS, the gathering noted excellent progress from Transfer Pricing support delivered to developing countries by the joint OECD, EC, and World Bank programme, including increased revenue yields for several countries. It is essential that this and other Task Force work remains practical and demand-driven. Strong results to date suggest the programme’s coverage should be expanded without delay. The Forum also welcomed BIAC's commitment to provide support to this work and the publication of its business principles. The Task Force encouraged additional practical work to improve the availability and access to relevant pricing comparables to support effective transfer pricing regimes.

In addition, the Meet welcomed the progress to establish ‘Tax Inspectors Without Borders’ (TIWB), an initiative to deploy the transfer of tax audit knowledge and skills for complex international cases, through a real time, ‘learning by doing’ approach. A first phase of deployments in Colombia, Ghana, Rwanda, and Zambia are being launched. The Task Force welcomed a report on these by mid- 2014. An advisory board for TIWB, comprising the Task Force Co-Chairs, representatives from governments, civil society and business was agreed to provide advice and to ensure on-going multi-stakeholder engagement. A practical Toolkit to support the sustainability of this project will be prepared by February 2014. A public launch event would be planned in early 2104. The Task Force urged tax administrations to indicate their interest in participating in future TIWB deployments.

Tax Transparency

The Task Force welcomed international action on tax transparency in 2013. It was agreed that all jurisdictions must work together to ensure that developing countries can benefit from these developments. In this regard, The Task Force welcomed the progress made by the Global Forum on Transparency and Exchange of Information for Tax Purposes to support the participation of developing countries. The gathering noted the Task Force support to help developing countries prepare for the Global Forum peer review process and plans to scale up this support in 2014 and beyond.

Tax Policy

The Task Force agreed that tax policy design is also key to better ensure the mobilisation of domestic resources and noted complementary action that would help to address base erosion and profit shifting. The Meet also urged the UN to continue to highlight the importance of taxation in the development of the post 2015 replacement framework for the Millennium Development Goals. Again, we offered our support in this endeavour.

Summary of immediate actions and deadlines:

 ++ A Task Force meeting dedicated to BEPS in March 2014 to inform a written submission into the BEPS project, by June 2014. Regional Africa and Latin America information sharing and consultation events will be held in early 2014.

 ++ An update on scaled-up support to developing countries from the joint OECD, World Bank and EC transfer pricing programme, by mid-2014. A scoping paper on transfer pricing comparability issues, by March 2014.

 ++ Tax Inspectors without Borders: A practical Toolkit to support the sustainability of this project by February 2014 and a report, by June 2014, covering pilot projects.

++  A report to input into the Global Forum and the G-20 Development Working Group on the opportunities and constraints facing developing countries in undertaking automatic exchange of information for tax purposes, by mid-2014.

++ Further reviews of tax incentives in developing countries on a demand-led basis and a knowledge sharing event on tax incentives will be planned for 2014.