Handbook - Developing Partnerships with Non-OECD Economies - Section 2.5

2. EVALUATION AND IMPACT

2.5 Self Assessment by NOE Partners

Other ways of measuring the impact of the programme have also been developed through dialogues with our NOE partners.  These dialogues are intended to establish objective, measurable outcomes that the partnership has achieved in terms of concrete legislative or policy developments. 

Comprehensive surveys of all NOE partners were last done in 2002-2003.  A total of 32 NOEs responded to the surveys in 2002-2003 including Albania, Argentina, Armenia, Azerbaijan, Bulgaria, Chinese Taipei, Croatia, Estonia, Georgia, Hong Kong, Israel, Latvia, Lithuania, Malaysia, Malta, Mongolia, Morocco, Nigeria, People’s Republic of China, Romania, Russia, Singapore, Slovenia, South Africa, Sri Lanka, Thailand and Vietnam.
The responses showed that CFA’s partnership activities were very effective in disseminating and encouraging the adoption of the OECD instruments such as the OECD Model Tax Convention and the OECD Transfer Pricing Guidelines, and in encouraging the adoption of effective exchange of information.  In addition to these areas, the Global Forum events also have a significant impact on improving the tax administration of participating NOEs.  Further details of the comprehensive survey of NOEs in 2002-2003 can be found in the Annex to this section of the online guide.
The impact on NOEs are also evident from the self evaluation reports that key NOE partners provide to the Advisory Group on Co-operation with Non-OECD Economies.  A number of key NOEs that attended the Advisory Group meeting provided their self-assessments of the impact of the partnership with CFA.
Chile reported that co-operation with OECD since 1994 in the taxation area has been very fruitful and has had a number of notable impacts in the areas of tax treaties, transfer pricing, harmful tax competition and exchange of information.  On tax treaty, involvement with the OECD has contributed to the rapid growth in Chile’s tax treaty network and has assisted Chile to gain a better understanding of international tax issues which in many cases were new to Chile.  Chile has taken the OECD guidelines on transfer pricing methods and comparability as a basis when auditing transfer pricing.  The co-operation with OECD in harmful tax competition also gave Chile an insight into the harmful aspects of different tax regimes and has helped Chile to develop countermeasures to deal with certain harmful tax regimes.  Chile reported that it is committed to the OECD Model with respect to practices on exchange of information. 
China noted becoming an observer to the OECD’s Committee on Fiscal Affairs (CFA) in 2004 as a milestone in their partnership with the OECD.  The extensive partnership programme has made a significant and direct contribution in the development of China’s tax system.  In particular,

• The OECD Model Tax Convention on Income and on Capital and its Commentaries provide useful principles and guidelines for China to negotiate their bilateral tax treaties.  Chinese tax officials have developed a better understanding of tax treaties and the latest changes in international trends as a result of the partnership programme with the OECD
• Several new regulations on transfer pricing issues were introduced in China in 2004 drawing on the OECD Transfer Pricing Guidelines.
• The work on harmful tax practices have resulted in a set of recommendations for the next round of tax reform in China.
• Two important implementation guides on exchange of information (Administrative Guidelines and Confidentiality Rules) were revised in 2004 to incorporate the international standards with the assistance from the OECD.

Malaysia reported that their partnership programme with the OECD has provided an opportunity for Malaysian tax administrators to enhance their skills and knowledge of tax issues that could arise from international transactions.  This has improved the tax officials’ ability to deal with avoidance transactions and resulted in increased revenue for the tax administration.  The partnership programme also helped to develop the human resources needed to establish and maintain a Transfer Pricing unit in Malaysia. 

Slovenia reported that OECD seminars and workshops where different tax issues were discussed provide an important source of expertise and information for the modernisation of Slovenia’s tax system.  On tax treaty, Slovenia noted their reliance on OECD Model as a basis for establishing Slovenia’s extensive treaty network.  The OECD events on tax treaty and transfer pricing provided information that was helpful in improving Slovenia’s understanding of new developments in treaty interpretation and in drafting new Slovenian regulations on transfer pricing, which is based on the OECD Transfer Pricing Guidelines.   The partnership has also had an impact on Slovenia’s commitment to avoid introducing harmful features in their tax system.  The new framework for co-operation, which was agreed in 2004, will further strengthen the partnership between Slovenia and the OECD.  Although the overall objective is to further improving the tax system and administration in Slovenia, future partnership events could focus on consolidating the impact of the programme in tax treaty, transfer pricing, exchange of information (including helping Slovenia to implement an effective mechanism for automatic exchange of information) and harmful tax practices. 
Hong Kong and South Africa also provided their reports to the Advisory Group.  Hong Kong reported that the OECD partnership event on Goods and Services Tax was very valuable for Hong Kong’s ongoing study of the introduction of a GST system.  South Africa reported that the balanced approach adopted in OECD events between theory and practice helped the participants to improve their effectiveness at work.