Following their meeting of 19 and 20 2018 the G20 Finance Ministers issued a communiqué covering the topics discussed. Issues affecting international tax are summarized below:
Technology
The communiqué notes that the benefits of technological transformation should be used to strengthen growth and productivity and secure sustainable tax systems. The Finance Ministers noted that certain technological innovations such as those giving rise to crypto-assets could provide benefits to the financial system and world economy but also recognized that other issues arise from the use of such technologies. Negative uses of crypto assets could lead to issues on consumer and investor protection; tax evasion; money laundering and terrorist financing. Vigilance is needed and the Finance Ministers therefore reiterated their commitments to the implementation of the Financial Action Task Force (FATF) standards. The FATF has been requested to clarify in October 2018 how its standards apply to crypto assets.
International Tax
The Finance Ministers confirmed their support for a fair, sustainable and modern international tax system. They recognized the importance of the implementation of the package on base erosion and profit shifting (BEPS). They are also committed to finding a consensus-based solution by 2020 in relation to the impact of digitalization of the economy on the international tax system, and called for an update in 2019.
In the communiqué the Finance Ministers called for all jurisdictions to sign and ratify the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.
Transparency and Exchange of Information
The communiqué called for jurisdictions commencing automatic exchange of financial account information for tax purposes in 2018 to make sure that steps are taken to comply with the deadline for implementation.
With regard to jurisdictions that do not adequately implement the international tax transparency standard the Finance Ministers will consider defensive measures against jurisdictions listed as non-compliant.
Tax Certainty and Capacity Building
The communiqué supported tax certainty and capacity building, mentioning the Global Knowledge sharing Platform for Tax Administration set up under the umbrella of the Platform for Collaboration on Tax. The Global Knowledge Sharing Platform is a global online tool aiming to promote sharing of tax knowledge and expertise by linking together experts on tax administration. The Finance Ministers also welcomed the setting up of the Latin America Academy for Tax Crime Investigation.
Illegal Financial Flows
The communiqué acknowledge the continuing efforts to combat illegal financial flows. The Finance Ministers called for full implementation of the FATF standards and called on the FATF to increase its efforts to combat proliferation financing.
Issues for Further Action
The Annex to the communiqué sets out issues for further action.
The OECD is requested to report by the time of the 2018 G20 Leaders’ Summit (on 30 November and 1 December 2018) on how many jurisdictions are at risk of not adequately implementing the international tax transparency standards. The OECD should list by the 2019 G20 Leaders’ Summit the jurisdictions that have not progressed far enough to an adequate level of implementation.
The OECD and IMF are also requested to report to the G20 Finance Ministers and Central Bank Governors meeting in 2019 on the progress made at that time in relation to tax certainty.
The Finance Ministers called on the Platform for Collaboration on Tax to develop a work plan to carry out its commitments by the date of the IMF/World Bank Group (WBG) meetings this year and to provide a progress report in 2019. The PCT is an initiative by the OECD, IMF, UN and WBG to provide capacity building support for developing countries.
