Double taxation, unresolved tax disputes, uncertainty in the application of international tax rules, heavy compliance burdens, all can act as barriers to the expansion of cross-border trade and investment. These risks, combined with today’s more competitive fiscal environment, have led to international tax considerations being an increasingly important focus of the tax debate in many OECD countries.
The OECD’s Committee on Fiscal Affairs, working with business, has for many years developed globally acceptable international tax norms to address these issues, including mechanisms to monitor their application and to resolve disputes when they arise.
The OECD, in cooperation with the USCIB, BIAC, IFA - USA, NFTC, OFII (1) and other institutions, organized in Washington on the 13-14 January 2005, an International Tax Conference to discuss the above issues and related OECD initiatives. Attending the conference were senior tax executives from over 50 companies, representatives from the US legislative and executive branches and key participants from the OECD’s groups dealing with these issues.
The conference was opened by the US Ambassador to the OECD, the Honorable Constance. A. Morella, who noted “…..the OECD has played a unique role in providing a framework for discussions of international tax issues and we welcome the involvement of US business in these discussions. This meeting provides a unique opportunity to strengthen this relationship”.
The discussion focused on two policy issues:
Participants welcomed the opportunity to discuss the draft (Improving the Process for Resolving International Tax Disputes) released by the OECD in the summer of 2004. They supported the OECD decision to develop a “Manual on Effective Mutual Agreement Procedures” (MEMAP). Business participants noted the OECD’s intention to pursue proposals for a mandatory submission of unresolved MAP cases to some form of supplementary dispute resolution mechanism and welcomed the proposal to examine the feasibility of implementing mandatory resolution of unresolved MAP cases for use by countries which wished to provide for a binding resolution of all cases. The US participants at this meeting showed a strong willingness to work with the OECD to finalize these proposals as quickly as possible. Jeffrey Owens, who leads the OECD tax work, concluded that “the discussions at this meeting will provide a useful input into our ongoing work in this area and our intention is to finalize this work by the end of 2006”.
To encourage a wider debate on these two issues, all the documents prepared for the conference are available on the website which can be accessed from www.uscib.org. Further information can also be obtained from the OECD’s Washington Centre, firstname.lastname@example.org.
(1) USCIB – United States Council for International Business; BIAC – Business and Industry Advisory Committee to the OECD; IFA – International Fiscal Association; NFTC- National Foreign Trade Council; OFII-Organisation of International Investment