An OECD Tax Talk held on 29 January 2019 summarised the latest tax developments.

Tax and Digitalisation

A Policy Note agreed by the Inclusive Framework was issued in January 2019. A public consultation document is to be released in February 2019 with a public consultation held by the Task Force on the Digital Economy (TFDE) in March 2019. A detailed program of work will be put forward for agreement by the Inclusive Framework at its meeting in May 2019. A report on progress can be made to the G20 Finance Ministers in June 2019 and the work can be completed in 2020.

Harmful Tax Practices

The 2018 Progress Report was released on 29 January 2019 by the Forum on Harmful Tax Practices (FHTP). In 2019 the FHTP will begin reviewing nominal or no tax jurisdictions. Ongoing reviews of preferential regimes will cover any new regimes; the 14 regimes still being eliminated or amended; and the 28 regimes that are currently under review. There will be ongoing monitoring of agreed aspects of preferential regimes and ongoing peer reviews of the transparency framework.

Multilateral Instrument (MLI)

The multilateral instrument (MLI) for incorporating tax treaty related BEPS provisions into bilateral tax treaties currently covers 87 jurisdictions and more than 1,500 matched agreements, plus 1,000 agreements waiting for a match. So far 19 jurisdictions have deposited ratification instruments in relation to the MLI which entered into effect for the first 47 agreements on 1 January 2019. More ratifications are expected in the coming months.

Implementation of Country by Country (CbC) Reports

Around 80 jurisdictions currently have CbC legislation in place. For 2016 a total of more than 7,000 CbC reports were filed, which was in line with expectations. More than 2,000 bilateral exchange relationships have been activated including those between the 75 signatories to the CbC MCAA (multilateral competent authority agreement). The exchanges of CbC reports are operating as intended.

In relation to the 2020 review of CbC reporting the first stage is to identify issues for consultation, based on issues raised by tax administrations, business and stakeholders. A public consultation is to be held in late 2019 or early 2020.

BEPS Action 14 – Mutual Agreement Procedure (MAP)

Work still to be done under Action 14 includes improving access to the MAP; bilateral renegotiations of tax treaties that will not be modified by the MLI; and ensuring implementation of MAP agreement irrespective of domestic time limits. Batch 5 of the Stage 1 peer review reports under BEPS action 14 will be published soon. Peer review batches 6 and 7 have been launched; and in mid-February there will be a request for taxpayer input on Batch 8 of the Stage 1 peer reviews. The process for batch 1 of the Stage 2 peer reviews has been initiated.

Corporate Tax Statistics

The first edition of Corporate Tax Statistics was launched by the OECD on 15 January 2019. The new database will support the analysis of BEPS and corporate taxation. The publication shows that corporation tax revenues are still a key source of revenues, especially in developing countries. Statutory corporate tax rates have been falling in recent decades. Effective tax rates are often well below headline rates as a result of special rates and innovation related incentives such as patent box regimes and tax credits or deductions for research and development.