Centre for Tax Policy and Administration

Special Tax Programme for Asia

 

The programme for Asia has now become the OECD's most important regional tax programme. This is partly due to the tax implications of the Asian financial crisis, but it also takes into consideration the tax reform initiatives in China and other countries in the region and the importance of Asian countries for the world economy.

OECD regional activities in Asia concentrate on issues of international taxation and related domestic issues, such as the taxation of foreign direct investment or the taxation of financial institutions. A close working relationship with other international organisations, including the Asia-Pacific Economic Cooperation (APEC) and the Asian Development Bank, and with the Member countries of OECD in the region has been established. This avoids overlap and duplication of assistance and guarantees a programme focus which is consistent with the OECD's comparative advantage.

A Multilateral Tax Centre was established in 1997 in Chonan, Korea. The Centre is a joint project of the OECD and the Korean Ministry of Finance and Economy. Five weeks of highly specialised workshops are offered every year to participants from China, Chinese Taipei, Hong Kong, India, Indonesia, Laos, Malaysia, Mongolia, Myanmar, Nepal, Papua New Guinea, the Philippines, Russia, Singapore, Sri Lanka, Thailand, Uzbekistan and Vietnam. The centre is the only venue where Asian tax experts can meet regularly to share experience.

Sample programme for the Korea-OECD Multilateral Tax Centre:

  • Tax Treaties Special Issues
  • Special Issues in Income Taxation
  • Transfer Pricing
  • Auditing Multinational Enterprises
  • Taxation of Financial Innovation in a Global Economy

In co-operation with OECD Member countries and international organisations, a number of special conferences are organised every year for the countries of the region. Examples of such activities are the biannual joint OECD-APEC Symposium on International Business Taxation, and the annual International Seminar on Taxation (ISTAX) in Japan. The OECD also participates in the annual Asian Development Bank (ADB) tax policy seminar.

There is no consensual view on the causes of the current financial instability in the Asian region. However, most commentators share the view that the domestic infrastructure (especially the financial institutions, regulatory authorities, standards of corporate governance, financial markets and legal system) of many countries in the Asian region were not adequately prepared for liberalisation. Accordingly, this infrastructure failed to cope adequately once the domestic financial system was exposed to international competition and open capital flows.

Correcting the structural and regulatory weaknesses to enable domestic economies to cope with fully open capital accounts is an immense task currently preoccupying public officials in the affected governments and in international organisations. The focus is both on recovering from the current crisis and preventing it spreading to countries not yet affected. Although the financial instability is greatest in countries integrated into the global economy, there are important lessons for countries (e.g. China) which have not yet fully opened their capital accounts. As part of this process, a broad range of policies need to be addressed. It is increasingly recognised that tax policy has a role to play in this task.

Taxation is a key public policy issue. Tax policy design is a powerful instrument to influence market incentives, financial structures and the sharing of risks and returns. At the same time, tax policy can present a major impediment to the proper functioning of markets if it is ill-designed and inefficiencies are created. Tax policy should accommodate, not frustrate, the proper functioning of markets and, to the extent possible, should be predictable and stable to minimise investor uncertainty. Tax policy should generally be neutral in its effects, facilitating rather than distorting financing, corporate investment and restructuring decisions.

In a period of rapid change, tax policy must be subject to ongoing review (and adjustment where necessary) in order to keep pace with market developments. Sufficient flexibility is needed to address financial innovation and accommodate prudent risk management. However, a difficult balance must be struck between allowing markets to operate as efficiently as possible and protecting the tax base from tax avoidance, tax arbitrage and harmful tax competition. It is therefore important that tax policies be addressed as part of the current review process.

In the context of a review of general economic policies, three broad tax issues may be identified:

  • Tax policies that encourage longer term capital inflows

    . Existing tax rules should be reviewed to see if they discourage long-term capital flows; new rules may be necessary to encourage long-term investments rather than short-term speculative inflows of capital (hot money).

  • Appropriate policies towards innovative financial instruments

    . Tax considerations should not prevent the use of more innovative ways of raising capital than simple bank debt. In addition, tax policies should aid prudent risk management by allowing effective post-tax hedging, especially against interest rate and currency movements, whilst at the same time protecting the tax base from unfair tax competition and abusive use of offshore financial centres.

  • Appropriate tax policies for the development of sound financial institutions and markets

    . Tax policies should be reviewed to ensure they support prudent risk assessment and management, help ensure orderly, liquid and transparent financial and capital markets, and assist the efficient allocation of foreign capital. Also tax policies must not aid imprudent practices of financial institutions or hinder the regulatory activities of monitoring authorities.

The programme will consist of high-level policy meetings, technical workshop, and country specific expert missions.

A number of activities have been undertaken at the request of particular countries. These activities build bridges with important countries in the region, building trust and encouraging their evolution toward OECD practices. Country-specific activities have been organised in the past primarily for Vietnam and Mongolia to support the tax reform in both countries. Additional target countries include Singapore, India, Indonesia, Malaysia and the Philippines.

 

 

 

Countries list

  • Afghanistan
  • Albania
  • Algeria
  • Andorra
  • Angola
  • Anguilla
  • Antigua and Barbuda
  • Argentina
  • Armenia
  • Aruba
  • Australia
  • Austria
  • Azerbaijan
  • Bahamas
  • Bahrain
  • Bangladesh
  • Barbados
  • Belarus
  • Belgium
  • Belize
  • Benin
  • Bermuda
  • Bhutan
  • Bolivia
  • Bosnia and Herzegovina
  • Botswana
  • Brazil
  • Brunei Darussalam
  • Bulgaria
  • Burkina Faso
  • Burundi
  • Cambodia
  • Cameroon
  • Canada
  • Cape Verde
  • Cayman Islands
  • Central African Republic
  • Chad
  • Chile
  • China (People’s Republic of)
  • Chinese Taipei
  • Colombia
  • Comoros
  • Congo
  • Cook Islands
  • Costa Rica
  • Croatia
  • Cuba
  • Cyprus
  • Czech Republic
  • Côte d'Ivoire
  • Democratic People's Republic of Korea
  • Democratic Republic of the Congo
  • Denmark
  • Djibouti
  • Dominica
  • Dominican Republic
  • Ecuador
  • Egypt
  • El Salvador
  • Equatorial Guinea
  • Eritrea
  • Estonia
  • Ethiopia
  • European Union
  • Faeroe Islands
  • Fiji
  • Finland
  • Former Yugoslav Republic of Macedonia (FYROM)
  • France
  • French Guiana
  • Gabon
  • Gambia
  • Georgia
  • Germany
  • Ghana
  • Gibraltar
  • Greece
  • Greenland
  • Grenada
  • Guatemala
  • Guernsey
  • Guinea
  • Guinea-Bissau
  • Guyana
  • Haiti
  • Honduras
  • Hong Kong, China
  • Hungary
  • Iceland
  • India
  • Indonesia
  • Iraq
  • Ireland
  • Islamic Republic of Iran
  • Isle of Man
  • Israel
  • Italy
  • Jamaica
  • Japan
  • Jersey
  • Jordan
  • Kazakhstan
  • Kenya
  • Kiribati
  • Korea
  • Kuwait
  • Kyrgyzstan
  • Lao People's Democratic Republic
  • Latvia
  • Lebanon
  • Lesotho
  • Liberia
  • Libya
  • Liechtenstein
  • Lithuania
  • Luxembourg
  • Macao (China)
  • Madagascar
  • Malawi
  • Malaysia
  • Maldives
  • Mali
  • Malta
  • Marshall Islands
  • Mauritania
  • Mauritius
  • Mayotte
  • Mexico
  • Micronesia (Federated States of)
  • Moldova
  • Monaco
  • Mongolia
  • Montenegro
  • Montserrat
  • Morocco
  • Mozambique
  • Myanmar
  • Namibia
  • Nauru
  • Nepal
  • Netherlands
  • Netherlands Antilles
  • New Zealand
  • Nicaragua
  • Niger
  • Nigeria
  • Niue
  • Norway
  • Oman
  • Pakistan
  • Palau
  • Palestinian Administered Areas
  • Panama
  • Papua New Guinea
  • Paraguay
  • Peru
  • Philippines
  • Poland
  • Portugal
  • Puerto Rico
  • Qatar
  • Romania
  • Russian Federation
  • Rwanda
  • Saint Helena
  • Saint Kitts and Nevis
  • Saint Lucia
  • Saint Vincent and the Grenadines
  • Samoa
  • San Marino
  • Sao Tome and Principe
  • Saudi Arabia
  • Senegal
  • Serbia
  • Serbia and Montenegro (pre-June 2006)
  • Seychelles
  • Sierra Leone
  • Singapore
  • Slovak Republic
  • Slovenia
  • Solomon Islands
  • Somalia
  • South Africa
  • South Sudan
  • Spain
  • Sri Lanka
  • Sudan
  • Suriname
  • Swaziland
  • Sweden
  • Switzerland
  • Syrian Arab Republic
  • Tajikistan
  • Tanzania
  • Thailand
  • Timor-Leste
  • Togo
  • Tokelau
  • Tonga
  • Trinidad and Tobago
  • Tunisia
  • Turkey
  • Turkmenistan
  • Turks and Caicos Islands
  • Tuvalu
  • Uganda
  • Ukraine
  • United Arab Emirates
  • United Kingdom
  • United States
  • United States Virgin Islands
  • Uruguay
  • Uzbekistan
  • Vanuatu
  • Venezuela
  • Vietnam
  • Virgin Islands (UK)
  • Wallis and Futuna Islands
  • Western Sahara
  • Yemen
  • Zambia
  • Zimbabwe
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