Strategizing Multinational Tax Risks

The OECD’s long-awaited Tax Inspectors Without Borders (TIWB) initiative (posts of 9 June 9, 2013 & 30 January, 2015) has now become a reality.  The program is a collaboration of the OECD with the United Nations (UN) Development Programme.

A framework of international tax experts will augment local tax authorities on current audits, providing advice on transfer pricing and cross-border information exchange that will result in significantly increased tax revenue collection by developing countries.

http://www.oecd.org/tax/launch-of-tax-inspectors-without-borders.htm

Ways of Working / Transparency observations:

• Will the list of countries’ receiving support be transparent?
• How will issue consistency be assured for similar issues of different taxpayers across that jurisdiction: will the “experts” also be developing this process?
• Will the “experts” be assisting in addressing/developing audit queries, issue determination, appeals and/or Competent Authority proceedings?
• Will the “experts” be available to discuss issues directly with the taxpayer, if they have assisted with determination of such potential issue?
• Is there a common “Memorandum of Understanding” that is shared with the taxpayer upon commencement of an audit, outlining the relevant processes that will be performed in collaboration by the relevant tax authority?

Answers to these questions, among others, will be helpful in providing additional context and understanding between taxpayers and tax authorities for this important initiative.

The metrics for monitoring such progress should include not only the amount of additional revenues assessed/collected, but should be inclusive of Best Practice methodologies and consistent methods of transfer pricing risk determination aligned with established laws in such jurisdiction.  

It is hopeful the UN and OECD will endeavor to provide additional mutuality and transparency for this initiative that will further enhance win-win opportunities.