On 8 December 2020 representatives of the members of the OECD’s Forum on Tax Administration (FTA) agreed on an agenda for 2021 focusing on tax certainty and digital enhancement of tax administration.
The FTA is a global forum on tax administration with 53 members covering the G20 and OECD member countries and some emerging non-OECD economies.
The plenary meeting of the FTA held on 7 and 8 December 2020 considered tax administration responses to the pandemic, risks encountered, implementation of digital systems and tax certainty. The representatives agreed to improve the resilience of tax administration in responding to crises by collaborating on new methods of working; developing IT tools; and introducing new ways of working.
Digitalisation
A roadmap will be drawn up in early 2021 to implement digital services in tax administrations on the basis of the vision for Tax Administration 3.0 which was published during the plenary meeting. Work will move forward on digital identity, e-invoicing and secure cross-border information exchange.
International Compliance Assurance Programme
The International Compliance Assurance Programme (ICAP) which has been piloted in the past few years will become an established programme to assess the transfer pricing risk of multinational enterprises.
The FTA launched ICAP to carry out multilateral risk assessment and assurance using country by country (CbC) reports and other relevant information to provide multinational enterprises and tax administrations with increased tax certainty. The second pilot scheme (ICAP 2.0) included 19 tax administrations. The established programme will now include an expanded number of tax administrations. More details of the activities will be issued in early 2021.
Tax Certainty
The communique issued by the FTA at the end of the plenary meeting confirmed its intention to continue the work on tax certainty by looking at improvements to Advance Pricing Arrangements (APAs); exploring greater use of multilateral APAs and mutual agreement procedures (MAPs); and using standardised benchmarking in disputed areas within transfer pricing.
More effective tax risk assessments will be assisted by the launch of a Tax Risk Evaluation and Assessment Tool (TREAT) to help countries analyse the CbC reports filed by MNE groups under Action 13 of the project on base erosion and profit shifting (BEPS).
Capacity Building
In the spring of 2021 the FTA will consider support for capacity building in developing countries in relation to digitalisation and projects by Tax Inspectors Without Borders which is a joint initiative of the OECD and UNDP.