UN Project on Building Capacity of Developing Countries to Protect Their Tax Base

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1 UN Project on Building Capacity of Developing Countries to Protect Their Tax Base Dominika Halka - Harry Tonino Financing for Development Office (FfDO) Department of Economic and Social Affairs

2 UN Intergovernmental Process New post-2015 development agenda with poverty eradication and sustainable development at its core Means of implementation including financing strategy Intergovernmental Committee of Experts on Sustainable Development Financing Third Conference on Financing for Development to be held in 2015 or 2016

3 Financing for Development and International Tax Cooperation General Assembly resolution 68/204 of 20 December 2013 The General Assembly 11. Recalls the resolve of Member States to enhance and strengthen domestic resource mobilization and fiscal space, including, where appropriate, through modernized tax systems, more efficient tax collection, the broadening of the tax base and the effective combating of tax evasion and capital flight, and reiterates that, while each country is responsible for its tax system, it is important to support national efforts in these areas by strengthening technical assistance and enhancing international cooperation and participation in addressing international tax matters

4 UN Committee of Experts on International Cooperation in Tax Matters Has been addressing issues in international tax cooperation, including those relevant to protecting and broadening the tax base Several Subcommittees involved in carrying out the work in this area Special attention to the needs of developing countries

5 OECD/G20 Project on BEPS Action Plan to address Base Erosion and Profit Shifting (BEPS) Recognized that developing countries also face issues related to BEPS, though their impact may be different than in the case of developed countries Called upon the UN to provide the perspective of and facilitate inputs from developing countries

6 UN Capacity-Development Project on Tax Base Protection: Objective Will draw upon the work of the UN Tax Committee and relevant Subcommittees, as well as the work of the OECD Project on BEPS Aimed at complementing that work from a capacity-development angle for the benefit of developing countries Will focus on strengthening the capacity of these countries to increase their potential for domestic revenue mobilization through protecting and broadening their tax base

7 UN Capacity-Development Project on Tax Base Protection: Process Work of the UN Tax Committee/ Subcommittees Papers on Selected Issues in Protecting the Tax Base of Developing Countries Developing Countries Demand/Inputs Work of the OECD Project on BEPS Ongoing Feedback by Interested Stakeholders Set of Capacity-Development Materials on Tax Base Protection for Developing Countries

8 UN Capacity-Development Project on Tax Base Protection: Scope General Overview Protecting the Tax Base of Developing Countries BEPS-related Issues Treaty Abuse Artificial Avoidance of PE Status Interest Deductions Hybrid Mismatch Arrangements Digital Economy Transparency and Disclosure Other Issues Relevant to Dev ing Countries Taxation of Services Taxation of Capital Gains Tax Incentives

9 Workshop on Tax Base Protection for Developing Countries: Agenda Overview of Major Issues for Developing Countries in Protecting the Tax Base Preventing Tax Treaty Abuse Taxation of Services Protecting the Tax Base in the Digital Economy Tax Incentives: Tax Base Protection Issues

10 Workshop on Tax Base Protection for Developing Countries: Modalities PRESENTATIONS Presentation of draft paper(s)/ outline(s) on specific topic(s) Presentation of relevant OECD work/inputs PANEL DISCUSSION Presentation/ inputs by Lead Discussant(s) on his/her/their own country experience and comments on presented papers/ outlines Brief follow-up comments by panelists GROUP DISCUSSION Comments/inputs by country representatives Comments/inputs by other experts

11 UN Capacity-Development Project on Tax Base Protection: Next Steps Presented draft papers will be reviewed taking into account the inputs/feedback received Further comments may be sent by by 13 June 2014 to Second batch of papers will be drafted on the basis of the presented outlines as reviewed to take into account the inputs/feedback received Follow-up workshop will be organized in September 2014 to review newly drafted papers

12 Thank you Dominika Halka - Harry Tonino Financing for Development Office (FfDO) Department of Economic and Social Affairs