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March 29, 2019
OECD’s Forum on Tax Administration agrees on collective actions on tax certainty, cooperation and digital transformation
On 28 March 2019, the Organisation for Economic Co-operation and Development’s (OECD) Forum on Tax Administration (FTA) published a communiqué at the conclusion of its 12th plenary meeting which took place in Santiago, Chile on 26-28 March 2019. At this year’s plenary, the FTA focused on four priorities: (i) Delivering on base erosion and profit shifting (BEPS) and tax certainty; (ii) Improving tax cooperation; (iii) Supporting the continued digitalization of tax administrations; and (iv) Building capacity for developing countries.
Also, at the plenary meeting, the FTA members welcomed the publication of seven reports which will provide direct practical assistance to tax administrations on the aforementioned four priorities.
The FTA was created in July 2002 by the OECD’s Committee on Fiscal Affairs, with the aim of promoting dialogue between tax administrations and identifying good tax administration practices. At the time of the plenary meeting, the FTA comprised 53 members.1 The Chile meeting brought together over 140 delegates, including tax commissioners and senior officials, as well as representatives from international partner organizations. Representatives of business and the profession (including EY) attended part of the event.
The communiqué outlined the agreed-upon actions and commitments made by the FTA in four key areas:
Among others, the FTA members agreed to:
BEPS and delivering tax certainty
FTA members will continue to prioritize implementation of the OECD/G20 international tax agenda, with good progress being made in supporting the implementation of Country-by-Country reporting, Mutual Agreement Procedure (MAP) and exchange of rulings. Given that tax certainty is high on the agenda of the FTA, the FTA members recognized that they should focus on improving dispute prevention and dispute resolution mechanisms. To that end, the following outcomes were concluded:
Improving tax cooperation
The work of the FTA in the area of tax cooperation is concentrated around two fronts: the Common Reporting Standard (CRS) and the Sharing and Gig Economy.
The communiqué highlights the success of the large-scale ongoing exchange of information under the CRS. Details on the CRS exchanges will be provided to the G20 in due course.
Also, the report The Sharing and Gig Economy: Effective Taxation of Platform Sellers was issued at the FTA plenary meeting. The main purpose of this report is to ensure the effective taxation of income derived from the sale of goods or services in the sharing and gig economy. The report considers the different ways that tax administrations can best engage with platform sellers, sharing and gig economy platforms, and assisting each other to enable more effective tax compliance. It contains three recommendations for further work: (i) engagement with sharing and gig economy platforms on educating platform sellers on their tax obligations; (ii) improving the evidence base to understand the tax at risk; and (iii) assisting policy makers in the development of a standardized reporting model, including facilitating greater exchange of information between tax administrations.
Supporting digital transformation
A key topic of the FTA meeting was how to build modern tax administrations by leveraging technological advances. It was agreed that the FTA members will work together on a digital vision for Tax Administration 2030 by setting out a pathway as well as the technological and organizational building blocks for digital transformation. The FTA members will also examine ways that new technology and new processes can be used to both enhance compliance and reduce burdens for taxpayers, with a particular focus on SMEs.
At the plenary meeting, the following three reports were issued that will provide direct practical assistance to tax administrations:
The FTA resumed the discussion on ways to improve the efficiency and effectiveness of capacity building and to enhance coordination with other international organizations. The following topics were discussed by the FTA:
Future FTA plans
Hans Christian Holte, Chair of the FTA and Head of the Norwegian Tax Administration, stated that the plenary meeting in Chile showed the FTA’s collective determination to progress an ambitious and strategic work program to enhance global tax administration, improve tax certainty and international cooperation and lead the way on providing better taxpayer services.
The subsequent FTA Plenaries will be held in the Netherlands in 2020 and in Singapore in 2021.
1. Argentina, Australia, Austria, Belgium, Brazil, Canada, Chile, Colombia, Costa Rica, Czech Republic, Denmark, Estonia, Finland, France, Georgia, Germany, Greece, Hong Kong (China), Hungary, Iceland, India, Indonesia, Ireland, Israel, Italy, Japan, Kenya, Korea, Latvia, Lithuania, Luxembourg, Malaysia, Mexico, Netherlands, New Zealand, Norway, People’s Republic of China, Peru, Poland, Portugal, Romania, Russian Federation, Saudi Arabia, Singapore, Slovak Republic, Slovenia, South Africa, Spain, Sweden, Switzerland, Turkey, the United Kingdom and the United States.
2. See EY Global Tax Alert, OECD launches International Compliance Assurance Programme pilot, dated 26 January 2018.
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (United Kingdom), London
Ernst & Young Belastingadviseurs LLP, Amsterdam
Ernst & Young LLP (United States), Global Tax Desk Network, New York
Ernst & Young LLP (United States), Washington, DC