The nineteenth session of the United Nations Committee of Experts on International Cooperation in Tax Matters was held from 15 to 18 October 2018. Issues discussed included transfer pricing, updates to the UN Model Tax Convention, dispute resolution, carbon tax and taxation of extractive industries.
Manual on Transfer Pricing
A new update of the Manual on Transfer Pricing is being prepared including new content on financial transactions and profit splits. The Committee is also considering a draft chapter on centralized procurement functions.
The Committee also continued to consider revised text on practical implementation; establishing transfer pricing capability; risk assessment and transfer pricing audits. Revised chapters were discussed on comparability; additional guidance on group synergies and centralized procurement functions; the general legal environment; and additional material on establishing and updating transfer pricing regimes.
Carbon tax
A UN Handbook on Carbon Taxation is being prepared and the Committee discussed a revised chapter 3 of the proposed Handbook concerning the design of the carbon tax. A revised draft will be presented for final discussion and approval at the next meeting of the Committee.
Extractive Industries Taxation
An update of the Handbook on Extractive Industries Taxation Issues for Developing Countries is being prepared. This will include a new chapter on Tax Incentives in Extractive Industries. This will be finalised at the following meeting of the Committee.
UN Model Double Taxation Convention
The Committee discussed issues relating to the concept of beneficial ownership; the possible modification of the capital gains article to address offshore indirect transfers of assets other than immovable property situated in the source country; and policy issues relating to the application of tax treaties to collective investment vehicles.
Tax consequences of the Digital Economy
The Committee discussed a draft paper on tax issues related to the digitalization of the economy, with proposals taking into account the interests of developing countries, administrability, fairness and certainty.
Dispute Avoidance and Resolution
The Committee is aiming to finalize the chapter on domestic dispute resolution mechanisms in the proposed Handbook on Tax Dispute Avoidance and Resolution. It is also discussing chapters dealing with arbitration and the possible use of non-binding dispute resolution mechanisms as part of the mutual agreement procedure.
Relationship Between Tax and Trade and Investment Treaties
A paper is being developed on some of the issues arising from the interaction of tax and certain trade or investment treaties. The UN is developing guidance on dealing with claims under non-tax treaties relating to tax measures and on managing the issues through risk assessment, prevention and mitigation.
Taxation and the Sustainable Development Goals
The Committee discussed the role of taxation in raising domestic revenue resources to finance the Sustainable Development Goals (SDGs). Relevant issues include the taxation of the informal economy and environmental taxation. The Committee is considering initiatives to collect and publish relevant information and practical guidance to support countries in their efforts on domestic resource mobilisation.
Capacity-building
The Committee considered further training activities related to capacity building and looked at UNDESA’s engagement in the work of the Platform for Collaboration on Tax, including joint tax capacity-building efforts.
