tax in a borderless world: the role of the oecd irs/george washington university 20th annual...

Tax in a Borderless World: Tax in a Borderless World: The Role of the OECDThe Role of the OECD

IRS/George Washington University 20th Annual International Tax ConferenceWashingtonDecember 13 & 14, 2007By Jeffrey Owens, DirectorCentre for Tax Policy and AdministrationOECDwww.oecd.org/ctp

December 13-14, 2007

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• Membership: 3 NAFTA, 4 Asian-Pacific countries and 23 European countries

• Setter of “soft” and occasionally “hard” rules• A forum for discussing the economic and social challenges

of interdependence and globalisation• A provider of comparative data, analysis and forecasts to

underpin multilateral co-operation

The OECD


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What are we?A forum for senior policy makers and administrators

What do we cover? All international and related domestic tax issues

• Biannual meeting • Eight subsidiary bodies• Centre for Tax Policy and Administration

How are we organised?

The Committee on Fiscal Affairs


The Committee on Fiscal Affairs

Subsidiary Body* Area of responsibility

Working Party N°1 Tax Conventions and Related Questions

Working Party N°2 Tax Policy Analysis and Tax Statistics

Working Party N°6 Taxation of Multinational Enterprises

Working Party N°8 Tax Avoidance and Evasion

Working Party N°9 Consumption Taxes

Forum on Harmful Tax Practices Addresses anti-competitive tax practices and is working with tax havens to improve transparency and to establish effective exchange of information

Forum on Tax Administration Focuses on taxpayer service and compliance

Board for Co-operation with Non-OECD Economies

Has the responsibility of supervising the alignment between the co-operation programmes with NOEs and the core interests and expertise of the CFA

4* Working Parties N° 3, 4, 5, 7 were abolished


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What are we?•Forty plus professionals grouped into 5 divisions: •Treaties/Transfer Pricing; •International Co-operation; Tax Policy; •Tax Administration; Outreach

• First Draft of reports for the CFA • Advise other parts of OECD on tax related issues (e.g R & D) • Assist governments in their tax reforms• Co-ordinate with other international organisations

What do we do?

The Centre for Tax Policy & Administration


Major outputs of the CFA

• Model Tax Convention• Transfer Pricing Guidelines• Standards on Exchange of Information • Best Practices Guidelines in Tax Administration• International VAT/GST Guidelines• Comparative Analysis and Statistics on Tax

Levels and Structures• Anti-Bribery Convention

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How governments participate in the OECD’s work

• Country ambassadors form Council of Ministers who set overall policy

• Senior tax policy-makers and administrators are delegates to CFA

• Technical experts (e.g. from Treasury and IRS) are delegates to subsidiary bodies

• Joint secretariat / government experts seminars with non-Member countries

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How do issues get onto the OECD’s tax agenda?

• Politicians (Secretary-General meets Ministers, annual ministerial, sector ministerials) e.g. tax and growth

• CFA delegates e.g. attribution of income to permanent establishment, business restructuring

• Business (BIAC, associations, individual companies) e.g. arbitration, CIV/REITS


Business participation in OECD’s tax work

• Business and Industry Advisory Committee to the OECD (BIAC) United States Council for International Business (USCIB)

• TAGs, BAGs, etc.• Discussion drafts• Public consultations

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Limited Membership, Global Reach

Why involve NOEs ?

• Global guidelines need global acceptance• To assist in the development of their tax systems

How ?

• Observers• Developing partnerships• Multilateral, regional and in-country programmes• Over 600 events with NOEs including around 14,000 officials

Outcomes• Twenty-five NOEs set out position on Model. Many NOEs basing transfer pricing legislation on 1995 Guidelines• A more coherent global tax environment for MNEs


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Current 30 Member countries account for

60% plus of world’s GDP

70% plus of inward and outward investment

Enlarging the OECD


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The Next Wave

• The five applicants: Estonia, Slovenia, Israel, Chile and Russia A 2-5 year process

• And at the same time enhancing our involvement with the BIICS (Brazil, India, Indonesia, China, South Africa) with a view to possible accession

• Continued deepening of partnerships with many other NOEs


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Candidate countries should committo the following core tax principles

• Eliminating international double taxation through complying with the key substantive conditions underlying the OECD Model Tax Convention;

• Eliminating double taxation through ensuring the primacy of the arm’s length principle, as set forth in the OECD’s Transfer Pricing Guidelines;


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Candidate countries should commit to the following core tax principles (2)

Engaging in effective exchange of information;

Combating harmful tax practices;

Eliminating double taxation through the development and implementation of International VAT/GST Guidelines.

Overall accession process provides opportunity to achieve greater convergence with OECD core principles


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The OECD in 2020

• All major economies

• Represented on all continents

• Accounting for 80 % of world’s GDP/Foreign Direct Investment


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How can we respond to these pressures?

(i) Providing rules on what’s acceptable / unacceptable tax practices to attract activities

(ii) Achieving a deeper understanding by governments of new business models and by business of the concerns of governments

(iii) Intensifying co-operation between governments to improve international tax compliance and enhancing the relationship between taxpayers and revenue bodies


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(iv) Achieving greater consistency in implementation of guidelines, models, etc.

(v) Identifying best practices in tax administration

(vi) Developing an OECD set of guidelines on VAT

(vii) Providing more comparative analytical material to inform the political debate on tax reform

How can we respond to these pressures (2)?

tax in a borderless world: the role of the oecd irs/george washington university 20th annual...

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