Strategizing International Tax Best Practices – by Keith Brockman

Posts tagged ‘toolkit’

TP Toolkit; a new guide

The Platform for Collaboration on Tax – a joint initiative of the IMF, OECD, UN and World Bank Group – has undertaken, at the request of the G20, the development of a series of “Toolkits” to help guide developing countries in the implementation of policy options for issues in international taxation of greatest relevance to these countries.

This toolkit, in draft version, is intended to provide an analysis of policy options and a “source book” of guidance and examples to assist low capacity countries in implementing efficient and effective transfer pricing documentation regimes.

This first part of the Toolkit provides information on the background, context and objectives of transfer pricing documentation regimes.

Part II then discusses a number of general policy options and legislative approaches relevant to all types of documentation requirements.

PART II. OPTIONS FOR COUNTRIES TO IMPLEMENT TRANSFER PRICING DOCUMENTATION

This section discusses various policy considerations and options relevant to designing a regime for transfer pricing documentation. These include:

  1. The regulatory framework, through a combination of primary legislation, secondary legislation and guidance;
  2. Confidentiality of taxpayers’ documentation and information;
  3. Timing issues concerning when documentation must be in place and when it is required to be submitted to the tax administration;
  4. Enforcement, including penalties and measures to assist and promote voluntary compliance;
  5. Dealing with access to information outside the jurisdiction; and
  6. Simplification and exemptions.

Part III focuses more specifically at each kind of documentation in turn, and examines the specific policy choices that are relevant to each, as well as providing a number of examples of country practices.

The final part sets out a number of conclusions.

 

Click to access draft-toolkit-transfer-pricing-documentation-platform-for-collaboration-on-tax.pdf

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Transfer Pricing

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The Platform’s TP toolkit

On 22 June 2017, the “Platform for Collaboration on Tax” (the Platform) – a joint effort of the Organisation for Economic Co-operation and Development (OECD), United Nations (UN), International Monetary Fund (IMF) and World Bank Group (WBG) – released a toolkit (the Toolkit) designed to help developing countries address the lack of “comparables” for transfer pricing analyses and better understand mineral product pricing practices.

This Toolkit should also be reviewed by multinationals (MNEs) in developing countries to address the potential lack of comparables to better understand how the tax authorities will approach a transfer pricing audit.  The mining supplement is required reading for those working in that industry.

Additional toolkits will be forthcoming:

  • TP documentation
  • Indirect transfer of assets
  • Base eroding payments
  • Tax treaty negotiation capacity
  • Supply chain management
  • BEPS risk assessment

As the first edition of the Toolkit has now been published, it will be interesting to watch developing countries apply the tools prescribed, providing a baseline going forward.  All international tax practitioners should be familiar with this latest joint endeavor, as it is an indication of the shared resource approach that is now our future.

EY’s Global Tax Alert provides additional details, and the OECD Toolkit are referenced for review.

Click to access 2017G_04037-171Gbl_OECD%20UN%20IMF%20and%20World%20Bank%20issue%20toolkit%20for%20difficulties%20in%20accessing%20comparable%20data%20for%20TP%20analysis.pdf

Click to access toolkit-on-comparability-and-mineral-pricing.pdf

Category:

OECD / UN

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OECD: Inclusive / transparent objectives

The OECD’s Task Force on Tax and Development met in Paris, France, on 1 March 2016, to discuss the new inclusive framework proposed by the OECD for the global implementation of the BEPS project and to support developing countries on their domestic resource mobilisation efforts. Over 180 participants attended.

Co-Chaired by South Africa and the Netherlands, the Task Force is a multi-stakeholder advisory group set up to help to improve the enabling environment for developing countries to collect taxes fairly and effectively.

Recognition and participation in the Tax Inspectors Without Borders partnership was also an agenda item, including present (and future) toolkits for developing countries as a practical resource to implement BEPS Actions.

Participants also highlighted the need for the documentation toolkit to provide clear guidance on how the Country-by-Country Report should be used for risk assessment purposes.

The Task Force will endeavor to take the following steps, commencing with the first meeting in Kyoto Japan, 30 June- 1 July 2016.

  • Support the development of 7 further toolkits to translate the BEPS deliverables into user friendly guidance for developing countries by 2018.
  • Starting now, fully endorse the ATAF/EC/OECD/WBG transfer pricing capacity building support to address the full range of BEPS challenges in developing countries.
  • Support the Tax Inspectors Without Borders programme project to increase the number of TIWB deployment programmes to 20 by the end of 2017 and 30 by the end of 2018.

A copy of the press release is provided for reference:

Click to access co-chairs-statement-task-force-tax-development-march-2016.pdf

Best Practices – To address mutual transparency, OECD and the member countries should be willing to share the contents, and objectives, of the various toolkits under preparation to better understand the risk process and actions by tax administrations around the world. 

 

 

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OECD

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BEPS: APAC Network update

The Asia-Pacific Regional Network on BEPS discussed the impact of BEPS on their region in its meeting on 12-13 February 2015, with over 50 senior tax officials from 21 jurisdictions and international organisations attending.  Attendees included the Asian Development Bank, IMF, US Agency for International Development (USAID) and the Study Group on Asian Tax Administration and Research (SGATAR).

Twelve direct participants in the BEPS project consist of Australia, Japan, Korea, New Zealand, China, India, Indonesia, Malaysia, Singapore, Bangladesh, Philippines and Vietnam.  The discussion summary is included for reference:

Click to access beps-regional-network-asia-co-chairs-summary-of-discussions.pdf

Discussion Summary:

  • Participants supported the cooperative and inclusive process for developing countries to support the OECD/G20 strategy.
  • All stakeholders, including MNE’s, should be engaged to address BEPS solutions.
  • Recognition of uncoordinated regional efforts addressing interest deductibility (Action 4), PE (Action 7), transfer pricing issues (Actions 8-10), and transfer pricing documentation (Action 13).
  • The introduction of toolkits, further support, and assistance is welcomed, including their participation in the OECD dialogue process.
  • Further guidelines on dispute resolution were requested by business and NGO representatives.
  • Future involvement will focus on additional engagement, participation and collaboration with various partners.
  • Next meeting is scheduled for 16-18 March 2015.

As the BEPS project proceeds to finalize its deliverables this year, the input of this organization and other interested parties will provide a limited window of opportunity to share views and practical suggestions to ensure consistency for taxpayers and tax administrations regionally and globally.  Accordingly, monitoring (including active participation in) future developments will be critical to form Best Practices for taxpayers and tax administrations.

Most importantly, it will be critical to ensure regional participants do not execute unitary legislation prior to release of the final OECD guidelines to ensure the BEPS process is successful.  The timing of such initiatives should also be a priority for the Asia-Pacific Network, its participants and other countries around the world. 

Related posts:

  1. OECD Tax Inspectors Without Borders (TIWB) and Toolkit: 30 January 2015
  2. Creation of task force and prior meeting of SGATAR: 1 December 2014
  3. OECD BEPS Strategy for Developing Countries: 13 November 2014

 

 

Category:

OECD / UN

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