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

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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

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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

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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

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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

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THANK YOU