On 22 September the OECD held its third presentation in its Tax Talks series. The purpose of the series is to provide an update on progress in relation to the BEPS action plan, and related international tax developments. This presentation focused first on the progress of the multilateral instrument (MLI) – a mechanism for implementing a number of BEPS measures which rely on cross border co-operation. The OECD were pleased to report that good progress has been made, with the main body of the text now agreed. Work will continue on fine-tuning and translation, and we should expect to see the draft released by the end of the year. The MLI will include provisions to implement all treaty related BEPS measures, with optional provision on mandatory binding MAP (mutual agreement procedure). The MLI has been designed to be as flexible as possible, and will provide clarity as to how it interacts with existing tax treaties. The MLI will be issued with an explanatory statement. It is anticipated that the signing ceremony will take place in the first half of 2017.
In addition to the MLI, the presentation also provided an update on G20 Tax Policy, and in particular noted the request from the G20 for the OECD to consider ‘tax certainty’. This project will start this year, with a data gathering exercise (via a questionnaire format) taking place this autumn, asking business to provide their views. The OECD has also been tasked by the G20 to consider ‘inclusive growth’, with a focus on removing inequality.
The presentation also highlighted a recent publication by the OECD, the first edition of a new annual publication aimed at providing an overview of tax reforms across the OECD. The first edition considered measures introduced in 2015, and included a list of ‘top reformers’ (countries implementing the most comprehensive tax reforms) – in 2015, these were identified as Austria, Belgium, Greece, Japan, Netherlands, Norway and Spain. There was also an interesting analysis of the estimated revenue effects of reform, which indicated that reforms in the areas of excise and VAT yielded the greatest revenues, with environmental taxes close behind.
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