The OECD held a tax policy discussion on digital taxation and BEPS implementation. Regarding digital taxation, countries are considering proposals focused on user participation and allocation of taxing rights. BEPS minimum standards on harmful tax practices and mutual agreement procedures are being implemented. Automatic exchange of information has begun and work continues on preventing tax avoidance through citizenship by investment schemes. Upcoming work includes finalizing guidance on financial transactions and reviewing Country by Country reporting implementation.

1. OECD TAX TALKS
16 October 2018
15:00 – 16:00 (CEST)
CENTRE FOR TAX POLICY
AND ADMINISTRATION

2. Join the discussion
Ask questions and comment throughout the
webcast via the following methods:
CTP.Contact@oecd.org
#OECDTaxTalks
2

3. INTRODUCTION

4. Panellists
• Pascal Saint-Amans
(Director, OECD Centre for Tax Policy and Administration)
• Achim Pross (Head of International Co-operation and Tax
Administration Division)
• Jeffrey Van Hove (Senior Tax Advisor, Tax Treaty, Transfer
Pricing and Financial Transactions Division)
• Melissa Dejong (Head of Harmful Tax Practices & Tax and
Crime Units)
• Félicie Bonnet (Advisor, Mutual Agreement Procedures Unit)
4

5. Topics
5
• Tax challenges of digitalisation
• BEPS Implementation
– Minimum standards
– Transfer pricing
• Tax Transparency
– Automatic exchange of information
– Residence/Citizenship by investment
• Next steps

6. Key developments
6
Start of Automatic Exchange of
Information
New work plan for the Platform
for Collaboration on Tax
Progress on the tax challenges
arising from digitalisation

7. DIGITAL

8. State of play
• Interim Report on the Tax Challenges
Arising from Digitalisation released in
March 2018
• Task Force on the Digital Economy
(TFDE) meeting in July: new
proposals to develop technically
8

9. Country approaches
• Focus on data and user participation
– Confined to certain highly digitalised business model
– No need for wide-ranging change
• Broader approach of allocation of taxing rights
– Not exclusive to highly digitalised business model
– Taking market jurisdictions more into account
• Minimum tax concept
– Establish a minimum tax rate - The 2017 tax reform in the U.S.
– Not specific for highly digitalized businesses model
9

10. Next steps
• OECD/TFDE to discuss proposals at its 4-5
December meeting
• G20 Inclusive Framework on BEPS meeting in
January 2019 to set the sense of direction
• Update report for the 2019 G20 Japanese
Presidency
10

11. BEPS
IMPLEMENTATION

12. Harmful Tax Practices
12
31 12
3
81
38
4
20
1
12
All regimes (175) – as at last week
Harmful (3)
Potentially harmful (1)
Abolished (12)
Amended (3)
In the process of being eliminated / amended (81)
Not harmful (38)
Potentially harmful but not actually harmful (4)
Out of scope (20)
Disadvantaged area (1)
Under review (12)

13. Harmful Tax Practices
• Exchange of information on rulings
– Cumulatively 16,000+ rulings in scope
– Almost 21,000 exchanges in 2016 + 2017
– Peer review results released later this year
• Revision of criteria
13

14. MLI
• 84 jurisdictions covered
• 15 jurisdictions have deposited ratification instrument
• Over 1,400 matched agreements + 1,000 waiting for a match
• Preamble and anti-treaty abuse rule (PPT) in all matched
agreements (minimum standard)
• Mutual Agreement Procedure (MAP) provisions updated in
light of Action 14 minimum standard
• 28 jurisdictions have opted for arbitration
14

15. MLI: Entry into force
1 2 3 4 5
Austria
Isle of
Man
Jersey
Poland
Slovenia
6
Serbia
7 8
New
Zealand
9
United
Kingdom
Sweden
1st July 2018
Entry into force
• MLI entered into force on 1st July, 2018 following deposit of the first five instruments of
ratification, approval or acceptance
• MLI enters into force on the first day of the fourth month after deposit of the instrument
• 15 ratification instruments deposited and more are expected by end of the year
• Entry into effect for a matched agreement
– Requires entry into force for both Contracting Jurisdictions
– MLI will start having effect for 47 tax agreements on 1st January 2019
Slovak
Republic
12
Australia
13
France
14
Japan
15
Israel
11
Lithuania
10

16. MLI: Arbitration
16
• 28 jurisdictions have opted for arbitration
• As those jurisdictions share their experience with arbitration,
expectations are that more jurisdictions will opt for arbitration.
Final offer (“baseball”) Independent opinion
Australia, Austria, Barbados, Belgium,
Canada, Curacao, Fiji, Finland, France,
Germany, Ireland, Italy, Liechtenstein,
Luxembourg, Mauritius, Netherlands, New
Zealand, Singapore, Spain, Switzerland
and the UK.
Andorra, Greece, Japan, Malta, Portugal,
Slovenia, Sweden

17. Action 6 Prevention of Treaty Abuse:
Peer review
Self-assessment Sept. to
Dec.
2018
Working Party 1 to
prepare Report
January
2019
Final Report
Process to be repeated in subsequent years
• Answer
questionnaire
• List all existing tax
treaties
• Indicate if comply
with the minimum
standard.
• Signature of the
MLI relevant.
• Secretariat draft
peer review
report
• Discussion in
September and
October with
jurisdictions
• Report to be
finalised in
December
•Report will be
presented and
discussed at the
January 2019
CFA/IF meeting

18. CbC Reporting:
Update on implementation
Domestic law
• >70 jurisdictions have implemented a CbCR filing obligation
(including those commencing after 2017)
• Substantially all MNEs above €750m revenue threshold covered,
estimated to represent 90% of corporate revenues
18

19. CbC Reporting:
Update on implementation
Exchanges
• 1800+ exchange relationships activated, including:
– between 72 signatories to the CbC MCAA
– under bilateral QCAAs (including 41 with the US)
• First deadline for exchanges: 30 June 2018
• Small number faced one-off technical challenges
19

20. CbC Reporting: Next steps
1. Risk assessment
– joint OECD-SAT Workshop in Yangzhou in September
– Further experience of tax administrations to feed into an updated
Risk Assessment Handbook
– CbCR risk assessment template to support developing countries
– complementary work within FTA LBIP (risk assessment initiative,
ICAP)
20

21. CbC Reporting: Next steps
2. Developing countries
– support in implementing a CbCR filing obligation and exchange
framework
– assistance in using CbC reports effectively and appropriately
3. 2020 review to commence in 2018
– input to be sought from stakeholders, including business
21

22. CbC Reporting: Next steps
4. Peer review – focus on three areas:
– updates to domestic law, including to address recommendations
– exchange framework and timeliness of exchanges
– the appropriate use of CbC reports
5. Aggregated CbCR data to be included in the Corporate Tax
Statistics dataset from 2019
22

23. MAP: Peer reviews
23
Stage 1 report published Stage 1 ongoing Not yet started
1st batch 2nd batch 3rd batch 4th batch 5th batch 6th batch 7th batch 8th batch 9th batch 10th batch
Belgium Austria
Czech
Republic
Australia Estonia Argentina Brazil Brunei Andorra Bahrain
Canada France Denmark Ireland Greece Chile Bulgaria Curacao Anguilla Barbados
Netherlands Germany Finland Israel Hungary Colombia China Guernsey Bahamas Kazakhstan
Switzerland Italy Korea Japan Iceland Croatia
Hong Kong
(China)
Isle of Man Bermuda Oman
United
Kingdom
Liechtenstein Norway Malta Romania India Indonesia Jersey
British Virgin
Islands
Qatar
United States Luxembourg Poland Mexico
Slovak
Republic
Latvia
Papua New
Guinea
Monaco
Cayman
Islands
Saint Kitts and
Nevis
Sweden Singapore New Zealand Slovenia Lithuania Russia San Marino Macau (China) Thailand
Spain Portugal Turkey South Africa Saudi Arabia Serbia Tunisia
Trinidad and
Tobago
Turks and
Caicos Islands
United Arab
EmiratesStage 2 ongoing
Status of work on peer reviews
Next batch

24. •Prevention of disputes (e.g. roll-back of bilateral APAs)
•Access and availability of MAP
•Resolution of MAP cases (e.g. pursued timeframe of 24 months)
•Implementation of MAP agreements
MAP: Peer reviews
24
Highlights of batches 3 and 4 reports
Very few
taxpayer
input
Impact of the
Multilateral
Instrument
2016 MAP
statistics
(+2017 for
batch 4)

25. MAP: 2017 statistics
25
Number of reporting
jurisdictions up: from 66
(2016) to 87 (2017)
Jurisdiction by
jurisdiction statistics
published for the first
time
Coverage includes
around 99% of all MAP
cases globally
Increase in number of
cases started and in
number of cases closed

26. MAP: 2017 statistics
26
2% 1%
6%
5%
6%
1%
3%
20%
1%
55%
MAP Outcomes no agreement including agreement to disagree
any other outcome
denied MAP access
objection is not justified
withdrawn by taxpayer
agreement that there is no taxation not in accordance with tax
treaty
resolved via domestic remedy
unilateral relief granted
agreement partially eliminating double taxation / partially
resolving taxation not in accordance with tax treaty
agreement fully eliminating double taxation / fully resolving
taxation not in accordance with tax treaty
Other cases
17 months
Transfer pricing
cases
30 months

27. TRANSFER
PRICING

28. Update on Financial Transactions
• The BEPS final reports contemplated additional transfer pricing
guidance related to:
– Attribution of profits to a permanent establishment (BEPS Action 7)
• Final guidance published March 2018
– The profit split method (BEPS Action 10)
• Final guidance published June 2018
– Hard-to-value intangibles (BEPS Action 8)
• Final guidance published June 2018
– Financial transactions (BEPS Actions 8-10)
• Non-consensus discussion draft published July 2018
28

29. Update on Financial Transactions
• Particularly challenging project
– Difficult to achieve consensus on fundamental issues
– For example role of the arm’s length principle in evaluating capital structure
• July 2018 Non-consensus discussion draft
– Focus on delineation and pricing of financial transactions
– Addresses cash pooling, guarantees, captive insurance, hedging, intra-group loans
– Sought public comments
• In-puts from the public particularly sought for non-consensus issues
• Robust public response
– Over 1000 pages of comments received
• Next steps – Find common ground and proceed to publication
29

30. TAX
TRANSPARENCY

31. Exchange of information
• Global AEOI is here: nearly 100 jurisdictions have commenced
exchanges
• Successful exchanges – an important factor in the OECD/G20 listing
• AEOI Implementation Report and G20 Report expected in Nov. 2018
• New ToR are finalised, work on methodology continues – to be
discussed at the upcoming Global Forum annual plenary
• This year’s plenary will take place in Uruguay (20-22 November)
with a LAC ministerial meeting taking place alongside
31

32. RBI/CBI: Background
• Growing number of countries offer
Citizenship/Residence by Investment schemes (aka
Golden Visas).
• IDs, residence permits and other documentation
obtained via such schemes can be abused to
misrepresent an individual’s jurisdiction of tax residence.
32

33. RBI/CBI: OECD Actions
• Analysed over 100 CBI/RBI schemes offered by CRS-committed
jurisdictions: high-risk schemes and guidance for Financial Institutions
published today
• High-risk schemes: are those that give access to a low PIT rate on income
from foreign financial assets and do not require significant physical
presence
• Risk mitigating factor: spontaneous exchange of information regarding
users of CBI/RBI schemes with original jurisdiction(s) of tax residence
33

34. RBI/CBI: Outcomes & next steps
• Financial Institutions equipped with tools to identify and
prevent cases of CRS avoidance through use of CBI/RBI
schemes.
• Dynamic list of high-risk schemes: regular updates and
roll-out to non AEOI-committed jurisdictions.
34

35. OTHER

36. Tax Policy Reforms 2018
Small cuts in personal income taxes for
low and middle income earners
Corporate tax rate cuts, but more of a
“race to the average” than to the bottom
Further progress on BEPS implementation
Stabilisation of VAT rates, but more VAT
revenues expected from administrative
and anti-fraud measures
Increased/new excise taxes on harmful
consumption (e.g., taxes on sugary
drinks)
Environmentally related tax reforms
focused on energy and vehicles, but
these taxes remain insufficient
A few significant property tax changes
Third edition with expanded country coverage to include 35 OECD countries + Argentina,
Indonesia & South Africa

37. Tax Inspectors Without Borders
37
• USD 414 million in increased
tax revenues attributable to TIWB
programmes
• 34 programmes ongoing, 10 completed
and 20 in the pipeline
• Target: deliver 100 deployments by 2020
in developing countries
• Webcast replay: http://bit.ly/tiwb-annual-
report-2017-18

38. Next steps
• G20 Leaders’ summit on 30 November –
1 December 2018
• Inclusive Framework on BEPS meeting in
January 2019
• G7 2019 France Presidency
• G20 2019 Japan Presidency
38

39. THANK YOU