Insights from Pascal Saint-Amans, Director of the Centre for Tax Policy and Administration of the

14 Pages·2016·1.23 MB·English

Global Tax
Policy and
Controversy
Briefing
Issue 18 | October 2016
This is an excerpt from the Global Tax
Policy and Controversy Briefing. For the
complete edition, go to www.ey.com/tpc.
“I t’s quite an exciting
time, as we now move
to rebalance the global
approach to tax policy.
We had BEPS to fight
tax avoidance, and we
have transparency to
tackle tax evasion —
we now need to
have tax certainty to
rebalance all of that.”
— Insights from
Pascal Saint-Amans,
Director of the Centre for Tax
Policy and Administration
of the Organisation for
Economic Co-operation and
Development
12
insights
18
inside issue
7 43
Brexit and UK taxation country updates
12
44
Insights from Pascal Saint-Amans, Director of the Centre
Japan
for Tax Policy and Administration of the Organisation for
Japan postpones consumption tax increase
Economic Co-operation and Development
46
14
Mexico
G20 leaders focus on promoting growth through tax policy
Mexican Supreme Court of Justice declares certain electronic
accounting requirements unconstitutional, validates others
19
The EU’s tax agenda for 2016/2017 48
UK
29
UK amends mandatory requirement for businesses to publish tax
An EY study on tax competition and the proposed common strategy
tax base for corporate income tax in Europe
52
33
US
GST: A new era of cooperative federalism in India Trump vs. Clinton: their tax proposals
37
65
Running the numbers: how data analytics is transforming
EY contacts
tax administration
Connect with EY Tax in the following ways: Global Tax Policy and Controversy Briefing is
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Access leading
Welcome to EY
global insights
Marlies de Ruiter
online
Global Tax
Policy and
Controversy
Briefing
Issue 18 | September 2016
With the speed, volume and complexity We are delighted to welcome Marlies
of tax policy and legislative and de Ruiter, former Head of the Tax Treaty,
regulatory change continuing to
Transfer Pricing and Financial Transactions
accelerate, accessing the leading
Division (TTP Division) at the Centre for
global insights has never been more
Tax Policy and Administration of the OECD,
important.
to EY. Under her leadership at the OECD,
EY is pleased to make available a Tax
the TTP Division developed seven of the
Policy and Controversy Briefing portal,
15 actions of the BEPS Action Plan. Before
providing earlier access to all articles
in this publication and more, including joining the OECD, Marlies gained more
interviews with minute-by-minute than 20 years of experience in the fields of
tweets of key news, daily tax alerts direct taxation and international tax issues
and more interviews with the leading
within the Dutch Ministry of Finance. Her
stakeholders in the world of tax.
vast experience with international tax
policy, and specifically with BEPS, will
demonstrate our leading position in the
Access the new portal at:
market on BEPS-related matters.
ey.com/tpcbriefing
Marlies is joining us to work on Tax Policy
and International Tax Services.
4 Global Tax Policy and Controversy Briefing
Chris Sanger Rob Hanson
EY Global Director, EY Global Director,
Tax Policy Services, Tax Controversy Services,
Ernst & Young LLP Ernst & Young LLP
[phone] [phone]
[email protected] [email protected]
As we head into the last Another trend we’re seeing relates consolidated corporate tax base
quarter of the year, the to the developments in digital tax proposal and has proposed a directive
administration. To cope with the growing that would require large multinationals
themes that will dominate
pace and volume of taxpayer information to publicly report tax information
the next year are becoming
flowing between governments and on a country-by-country basis.
clearer. Given diminishing businesses, many tax authorities are
Continuing the interest in public reporting
forecasts for growth, it should increasingly relying on digital methods
of tax, the UK has recently enacted new
to collect and analyze this data. As the
come as no surprise that fostering rules requiring certain businesses to
article on page 37 explains, it is critical
growth and the role that tax policy publish their tax strategy as it relates
that companies respond to the new era
to affects UK taxation (Paul Dennis and
can play to grow economies and of digital tax compliance by reviewing
Geoff Lloyd provide more details on
address budget deficits is under their data management and analytics
page 48). With the recent introduction in
active discussion. In fact, at the capabilities to check that they can meet Australia of a voluntary tax transparency
the requirements and rapid turnaround
recent G20 summit in Hangzhou, code, which encourages medium and
times being demanded by tax authorities.
China, the role of taxation in large businesses to publicly disclose
Meanwhile, in the European Union how much tax they pay and explain
promoting innovation-driven,
(EU), the intense focus on multinational their tax strategies, such transparency
inclusive growth was a key
companies’ tax affairs continues. To initiatives could herald many more.
agenda item. date, most of the attention has been Companies should expect to see
on the alleged State Aid violations governments begin to require greater
As Jeffrey Owens explains on page 15, involving tax rulings granted by EU public transparency as to how their
and Pascal Saint-Amans of the Member States to multinational profits are taxed, where their intangible
Organisation for Economic Co-operation companies. But, as Klaus von Brocke assets are located and the underlying
and Development previewed at the and Steve Bill explain on page 19, the rationale for their business decisions.
EY aHead of Tax client event in June, EU’s tax agenda covers much more
Once again, we are in a busy period
the G20’s focus on boosting growth than the State Aid investigations. For
of tax policy changes and proposals,
through tax could usher in another era example, the European Parliament has
leading to and driven by tax controversy.
of significant tax reform — one that set up an inquiry committee into the
For businesses seeking to put this all
will extend beyond the Base Erosion so-called Panama Papers’ revelations.
in perspective and gain insight into
and Profit Shifting agenda and could In addition, the European Commission
what may come next, this edition of
encompass all components of countries’ has adopted a wide-ranging action plan
the Global Tax Policy and Controversy
tax systems. See the article on page 52 intended to modernize the current EU
Briefing provides food for thought.
outlining what the US presidential value-added tax rules, is gearing up for
candidates are thinking about US a November relaunch of the common
tax reform.
Welcome
Global Tax Policy and Controversy Briefing 5
Insights from Pascal Saint-Amans,
Director of the Centre for Tax Policy and
Administration of the Organisation for
Economic Co‑operation and Development
s
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h
g
i
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i
Appearing via video, Pascal Saint-Amans detailed the latest direction of the OECD’s
post-BEPS tax work with business representatives at the EY aHead of Tax client event held
in Barcelona, Spain, on 14–16 June 2016. Following is a transcript of his remarks.
12 Global Tax Policy and Controversy Briefing
Good morning to you all. I’m Tax certainty minimum standard on MAP under BEPS
deeply sorry not to be with The G20 will also push for tax certainty Action 14 will be a game changer. Action
14 is focused on ensuring that treaty-
you in this wonderful city of as part of a pro-growth agenda. The idea
related disputes can be effectively and
here is to start work over the next two
Barcelona. I had to stay in
efficiently resolved under MAP, so that
years, in particular when the German G20
Paris today because we are taxpayers have more legal certainty.
Presidency starts on 1 December of this
preparing for the first meeting The MAP Forum will be starting the
year, to deliver some practical outputs
of the inclusive framework for to improving tax certainty. So, there peer review process very soon after the
30 June–1 July meeting in Kyoto on
BEPS implementation, which will be a macroeconomic survey of the
the new inclusive framework for BEPS
impact of tax uncertainty on investment
will take place in Kyoto, Japan,
implementation. We expect to see maybe
and, in turn, on growth and jobs.
less than 15 days from now. 90, 100 countries join the framework.
Beyond that, we’ll try to promote practical
I’m happy, however, to share with you instruments to improve tax certainty. What’s next?
some insights on the tax work that we We’ll promote the value of advance So, you can see that we have a big
are doing at the OECD. I think there pricing agreements, and push for a agenda ahead of us. There is also the
is some BEPS fatigue among all of us, better way to resolve disputes through work that the OECD is doing with the IMF,
starting with me, but the BEPS project mutual agreement procedures (MAP). the World Bank, and the UN to establish a
is still very high on our agenda. We’ll also try to get as many countries Platform for Collaboration on Tax, which
as possible to commit to mandatory will enable us to join forces in terms
Transparency
binding arbitration, which will be of delivering technical assistance to a
There is more to come on the included in the multilateral instrument large number of developing countries on
international tax agenda. You, of course, to implement tax treaty-related BEPS strengthening their tax capacity-building
saw the news that the transparency measures that is being negotiated by efforts and designing better tax policies.
agenda has been refocused after the more than 95 countries. To date, I think
release of the Panama Papers and the we have 96 countries — which covers We at the OECD have a lot to do, which
other leaks related to the BVI and other more than 2,000 bilateral treaties — may explain why I was not fortunate
jurisdictions. We have a lot of work to participating in the development enough to be able to be with you today.
do in this area to improve access to of the multilateral instrument. But it’s quite an exciting time, as we
beneficial ownership information. We’re now move to rebalance the global
working with the Financial Action Task We expect to open it for signature by approach to tax policy. We had BEPS
Force on this front, and there will be the end of this year, and hope to have to fight tax avoidance, and we have
important steps on the way forward, countries begin signing it during the transparency to tackle tax evasion —
particularly at the G20 finance ministers’ German G20 Presidency in the first half we now need to have tax certainty to
meetings in July and October, and at of 2017. The multilateral instrument rebalance all of that. Taxpayers must
the G20 leaders’ summit in September. will include an optional provision on pay their due to tax administrations.
mandatory binding arbitration, and the But, tax administrations must in return
Tax and growth challenge here will be to get as many trust taxpayers that have demonstrated
Beyond the transparency agenda, we are countries and jurisdictions as possible they can be trusted, and also provide
starting a new tax pillar with the G20. to “opt in” to the arbitration provision. more certainty and better tax policies.
The G20 will push for better tax policies
Tax administration The OECD is there to promote these
across the G20 and across the world to
policies, which I hope will be helpful to
The OECD Forum on Tax Administration
increase growth. The world today needs
tax administrations, governments and
(FTA) will continue to promote the
growth — jobs and employment — but we
taxpayers alike. So, I wish you a very
value of cooperative compliance
must also reconcile a pro-growth agenda
fruitful meeting today and regret that
between revenue bodies and large
with the need to reduce inequalities. The
I could not be with you. Thank you.
business taxpayers. I think the FTA
question we’ll have to address is, how do
MAP Forum’s work on reviewing the
we square that from a tax perspective?
Global Tax Policy and Controversy Briefing 13
EY contacts
Global Leaders
Chris Sanger Rob Hanson
EY Global Tax Policy Leader EY Global Tax Controversy Leader
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[phone] [phone]
EY Americas
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66 Global Tax Policy and Controversy Briefing
EY Americas
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Honduras Rafael Sayagués Rafael Sayagués
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Israel Arie Pundak Gilad Shoval
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Mexico Jorge Libreros Enrique Ramirez
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Nicaragua Rafael Sayagués Rafael Sayagués
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Panama Luis Ocando Luis Ocando
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Peru David de la Torre David de la Torre
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Global Tax Policy and Controversy Briefing 67
EY Asia-Pacific
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Tax policy and Alf Capito Howard Adams
controversy leaders [email protected] [email protected]
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Singapore Russell Aubrey Siew Moon Sim
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South Korea Dong Chul Kim Dong Chul Kim
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68 Global Tax Policy and Controversy Briefing