On April 14, 2016 the OECD published a report from OECD Secretary-General Gurria that was presented during the G20 Finance Ministers meeting in WashingtonDC (UPDATE ON TAX TRANSPARENCY). In the report the Secretary-General urges the international community to call time on all remaining holdouts who have yet to implement internationally agreed tax transparency standards.
In the report a.o. the following subjects are discussed:
- Major progress towards transparency has been achieved with robust standards available
- Efforts must be continued and intensified, and attention now focused on implementation challenges
Standards must now be endorsed by all relevant jurisdictions
PROPOSED ACTION: The G20 should reaffirm the need for the identified countries and jurisdictions to commit to the CRS without further delay. Countries should now sign the multilateral Convention on Mutual Administrative Assistance in Tax Matters noting that only sovereign States can legally sign this instrument, as well as the Competent Authorities Agreements for the CRS without further delay.
Standards must now be implemented
PROPOSED ACTION: The G20 should call on all countries and jurisdictions to take all necessary actions to have their legal and regulatory frameworks in place and to properly implement the EOIR standard in practice so that they are all at least “largely compliant” by the G20 Summit in 2017.
The implementation of the Common Reporting Standard (CRS) needs to be implemented on time
PROPOSED ACTION: Countries and jurisdictions should speed up their implementation efforts of the CRS to ensure they deliver in accordance with the timelines to which they committed and the Global Forum should report to the G20 in July 2016 on the state of the implementation, with a plan to address possible deficiencies.
- Enhancing the effectiveness of transparency and tax co-operation
Ensure the integrity of the CRS
PROPOSED ACTION: The OECD working with G20 countries will develop measures to ensure the integrity of the CRS, and report on progress to the G20.
Use the OECD’s Oslo Dialogue to improve access to beneficial ownership information, and take action against those seeking to conceal it
PROPOSED ACTION: Progress should be made towards more effectiveness in the implementation of the beneficial ownership identification rules and alternative solutions should be explored to make sure the information is more readily available. In addition, the OECD’s Oslo
Dialogue should be mandated to come up with recommendations to strengthen effectiveness of inter-agency and cross-border co-operation that could tackle tax crimes and other financial crimes.
Exploring defensive measures
PROPOSED ACTION: The G20 could consider how to further proceed with the recommendations on defensive measures.
Further the report contains an Annex providing an update on Panama’s progress to commit and implement the tax transparency standards.
OECD, UN, IMF and World Bank form tax collaboration platform
The OECD has teamed up with the International Monetary Fund (IMF), the UN and the World Bank Group (WB) to create a new platform for collaboration on tax, with the aim of boosting global co-operation in tax matters.
The Platform will work on:
- Developing appropriate tools for developing countries
- Supporting developing countries to participate in the implementation of BEPS
- Building effective tax systems and building awareness
- Providing a venue for information sharing
The first of the toolkits addresses tax incentives and was issued in November 2015. The remaining seven toolkits will address the indirect transfer of assets (September 2016), transfer pricing comparability (October 2016), transfer pricing documentation (October 2016), tax treaty negotiation capacity (December 2016), base eroding payments (June 2017), supply chain management (March 2018), and BEPS risk assessment (March 2018).
OECD BEPS Webcast - June 16, 2016
The slide deck starts with a trend overview of the author and subsequently relevant tax survey findings were gathered that relate to these trends spotted. The complete overview is relevant from a priotization and tax strategy perspective.
Embrace new technologies and catch up
Compliant tax software solutions for the global management of tax processes
In essence, HRMC’s increases its expectations towards large businesses with regard to a more and more transparent tax management strategy. However, the publication of a tax strategy will clearly not be sufficient. It is just the starting point for the provision of a clear picture about the risk management and controls in place of tax relevant processes. The daily management turns on the radar.
State-of-the-art tax compliance management software is required.
In difference hereto, the view into the current daily practice provides a different and non-compliant picture:
Widespread use of Excel spreadsheets, decentralized storage of tax relevant documents, lack of documented controls, lack of automation, global lack of tax compliance software tracking individual changes and filings, lack of standardized reports immediately available upon request, lack of in-built double-checks for the calculation of current and deferred taxes on reporting entity level, lots of tax relevant data stored at external outsourcers (e.g. external tax advisors and accounting firms), several tax software tools in place at various locations which are neither interfaced among each other and with the ERP systems in place, etc.
It is obvious that tax departments which are not adapting its process management to the requirements addressed by HMRC and other tax authorities may struggle with regard to compliance, efficiency and transparency.
Therefore, compliant tax software solutions for integrated tax management like the U² software from Universal Units become more and more important
Phenix Consulting - our services - team - network
Related GITM articles
- Examples of public Fiscal Transparency statements
- The Tax Transparency Benchmark 2015
- BEPS 2015 Final Reports
- EU - Public consultation on further corporate tax transparency
- CbC reporting / tax transparency: Accounting Directive
- Improving large business compliance
- Tax administration: large businesses transparency strategy
- Spreadsheets and Compliance
- Tax Strategic Plan
- Tax Control Framework