APEC Finance Ministerial Meeting
Session 4 - Implementation of the BEPS Project
Remarks by Angel Gurría,
Lima, Peru, 15 October 2016
(As prepared for delivery)
I am delighted that APEC has made tackling tax avoidance and evasion a priority and pleased to be here with you today to share the latest developments in our work on these issues, which the OECD has been undertaking in partnership with economies across the globe, including a growing number of APEC economies.
We know now that BEPS (Base Erosion and Profit Shifting) is costing governments significantly: both in terms of revenues lost – conservatively estimated to be between 100-240 billion US dollars annually across the globe – but also in terms of the loss of trust in the fairness of our tax systems and in governments more generally.
In the face of such significant challenges, we must act together and today we have the tools to do so. Last October, we delivered a comprehensive set of measures to tackle BEPS, and since then we have established an Inclusive Framework on BEPS to ensure effective implementation, which already includes 85 jurisdictions on an equal footing, including 15 APEC economies and close to 40 non-OECD / non-G20 countries. This opens a new era of inclusive participation in setting the international tax rules and monitoring their implementation, as all members of this framework – developed and developing countries – have direct involvement on an equal footing.
The Inclusive Framework is complemented by regional network meetings, with the first one held in Latin America and the next one to be held in the Philippines in December. Through these fora and our collective efforts we must ensure that there is coherent and consistent global implementation so that we close the gaps and loopholes in the international tax system that currently allow multinationals to pay little or no corporate tax anywhere..
The good news is that implementation is already happening. Many countries – including APEC economies such as Chile, Malaysia, and Peru, – have taken actions to put the BEPS measures in place. This is the case with respect to country-by-country reporting, which will provide important data to enable more effective risk-assessment analysis and more efficient allocation of audit resources.
Many APEC economies have also participated this year in the negotiation of the multilateral instrument to implement the tax treaty-related BEPS measures. 98 countries are involved, which together cover more than 2,000 bilateral treaties. We are on track to deliver the instrument and open it for signature by States by the end of this year.
We are also doing more to ensure international cooperation between international and regional organisations. Through the newly created Platform for Cooperation on Tax, we are harnessing the combined expertise of the OECD, IMF, World Bank Group and the UN to support a coherent approach on domestic and international tax issues when working with different economies. This includes a series of practically-focused toolkits where regional tax organisations are also providing input, to address the top-priority BEPS-related issues facing developing countries, such as wasteful tax incentives and challenges in accessing relevant transfer pricing information, including in the minerals sector.
With this focus on BEPS, which largely involves legal tax avoidance, we must not forget the ongoing fight for greater transparency to tackle tax evasion. We continue to build new and better tools to exchange tax information across the world. With many economies on the verge of undertaking their first automatic exchanges of financial account information in 2017 and 2018, I take this opportunity to again encourage you to move forward and draw on new tools like the Common Transmission System and the multilateral competent authority agreement that the OECD has developed to ensure the benefits of automatic exchange of information are available to all. Already, almost 55 billion euros in additional revenues have been identified by voluntary disclosure programmes and similar initiatives in the lead up to the implementation of automatic exchange of bank account information.
Our tax team is already working with many of you through the Global Forum on Tax Transparency, the Inclusive Framework for BEPS, and our extensive capacity building programmes, such as Global relations and development. I look forward to strengthening those relationships, including through our participation in APEC, and offer the OECD’s continuing support to advance APEC’s agenda on international tax issues.