Handbook - Developing Partnerships with Non-OECD Economies - Section 5 Event Description

Event Description

1. International Tax Avoidance and Evasion
2. Tax Incentives
3. Auditing Multinational Enterprises
4. VAT Compliance
5. Transfer Pricing Guidelines
6. Taxation of Financial Markets
7. Exchange of Information and Access to Bank Information
8. Tax Treaty Issues
9. Auditing Small and Medium Sized Enterprises
10. Tax Policy Analysis
11. Tax Policy Modelling
12. Income Tax
13. Taxation of Non-Residents

1. International Tax Avoidance and Evasion

This purpose of this workshop is to examine some common techniques that are used by enterprises and individuals to avoid and evade taxes, with a particular emphasis on tax avoidance and evasion in international transactions.  The seminar covers the avoidance and evasion possibilities created by offshore banks/financial centres, tax havens and preferential tax regimes, transfer pricing techniques, use of permanent establishments and financial market developments.  The workshop also introduces common responses introduced by governments in their domestic law and international tax treaties to control the extent of international tax avoidance and evasion.  The common responses that will be discussed in this workshop include:

• improving access to bank information;
• effective exchange of information;
• controlled foreign company rules;
• the arm’s length principle; and
• thin capitalisation rules and other rules to deal with financial market innovations.

Target Audience: officials from the Ministry of Finance and the Tax Administration who deal with the taxation of international transactions.

2. Tax Incentives

The seminar surveys the types of incentives, their effectiveness in achieving their objective, and issues in their design and administration.  Tax incentives in various taxes, including corporate and personal income taxes and consumption taxes, are examined with practical examples taken from OECD and Non-OECD countries.

Target Audience: Policymakers responsible for designing tax systems.

3. Auditing Multinational Enterprises

The objectives of the seminar are to provide participants with a basic knowledge of the issues to anticipate when auditing multinational enterprises.  The seminar includes discussions of the most significant legal and practical issues to be taken into account. It deals with the creation and legal significance of a multinational enterprise (MNE), the tax principles underlying the operation of an MNE, tax avoidance and anti-avoidance strategies, the operation of tax treaties, and an introduction to transfer pricing and thin capitalisation issues. Furthermore, the “best practice” audit approaches that are adopted to deal with these entities by OECD countries as well as countries participating in the seminar will be examined.  Audit examples are included as far as possible to encourage debate and provide a practical basis for the examination of these issues in the work place. The seminar will also deal with the relevant administrative provisions, information requirements and the audit process itself in order to facilitate the work of tax examiners who may have only limited expertise. 

Target Audience: senior and middle level tax administrators and tax inspectors responsible for or engaged in the audit of multinational enterprises.

4. VAT Compliance

The rapid growth in international trade in goods and services has coincided with the global spread of value added taxes (VAT) with almost 140 countries now using such taxes. By 2002, VAT accounted for 18.7 percent on average of all tax revenues across OECD members, compared to 11.9 percent in 1965.
Many countries, both developed and developing, have suffered significant losses of VAT revenue through non-compliant behaviour of the taxpayers. Criminal attacks, such as so called “carousel fraud”, fraudulent refund claims, tax evasion and tax avoidance are widespread.
This seminar will provide a review of the basic functionality of the VAT system; examine specific problems which are vulnerable to manipulations, consider how policy can be developed to meet new challenges and reduce exposure to non-compliance, and point out countermeasures to tackle fraudulent and abusive activities.

In the area of tax administration participants will be presented with effective approaches to audit, tax collection, and taxpayer service, from experiences gained in OECD member countries.

Target Audience: Senior tax policymakers and tax administrators with responsibility for indirect tax policy/administration and/or tax administration more generally (e.g. compliance, tax audit).

5. Transfer Pricing Guidelines

The seminar aims to provide an introduction to transfer pricing issues, largely by looking in detail at the OECD transfer pricing guidelines.  The topics covered include a description of the arm's length principle and allowable transfer pricing methodologies, comparability, risk and functional analyses in special problem areas, such as intangibles and services.  Particular attention is also given to the application of both traditional and profit methods.  Administrative issues are also studied, for example, the collection and exchange of information and the use of Advance Pricing agreements and the Mutual Agreement Procedure.  The course is designed to be practical in nature, so the topics covered are illustrated by the frequent use of case studies.  Time should also be available for a discussion of any difficulties experienced by participants.

Target Audience: Senior administrators involved in organising, managing and conducting transfer pricing audits of multinational enterprises.

6. Taxation of Financial Markets

As financial markets are progressively liberalised, tax administrations will also begin to face many challenges.  Amongst these challenges are the needs to bring into the taxation structure financial institutions and the products and services they offer using measures that will promote rather than stifle their developments.  On the other hand, tax administrations also have to adopt effective measures to limit the ability of taxpayers to abuse the tax arbitrage and avoidance opportunities made possible by financial market innovations.  This workshop will focus on the broad policy issues in the taxation of financial markets, the domestic and international taxation issues specific to the taxation of banking, insurance and investment activities and the policy issues in the taxation of enterprises and individuals as end users of innovative financial products such as derivatives contracts.

Target audience: Officials from Ministries of Finance and Tax Administrations who deal with the taxation of banks, insurance activities, collective investment institutions and other financial market activities.

7. Exchange of Information and Access to Bank Information

Exchange of information between tax administrations is the most effective way of combating international tax avoidance and evasion. The aim of this workshop is to share the experiences of OECD and non-OECD economies as regards the exchange of tax information between competent authorities; and to identify ways of improving the efficiency of this process. The workshop will draw upon OECD work in this area. The underlying legal basis for international exchange of information will be examined and illustrated with case studies highlighting the balance between the legal obligation to exchange and the limitations that safeguard taxpayers’ rights. Practical advice will be provided on how to make a request for information and how to respond to a request; and the use of new technologies to share information will be discussed. In addition, the workshop will examine the issues raised in the OECD report Improving Access to Bank Information for Tax Purposes.

Target audience: Senior taxation or finance officials involved in the legal and practical aspects of exchange of information with tax treaty partners (i.e. competent authority work).

8. Tax Treaty Issues

The purpose of the seminar is to provide the participants with the background necessary for the negotiation, interpretation and application of conventions on the elimination of double taxation on income and on capital.  As such, it involves an article by article examination of the OECD Model Tax Convention, on which most such conventions are patterned.  Practical aspects of the negotiation of tax conventions are also dealt with, but tax treaty negotiators should attend the seminar on Tax Treaties Negotiation where this issue is covered in more detail.  Issues arising out of the application and interpretation of conventions, once they have entered into force, are addressed during the seminar.

Target Audience: policy-makers and senior administrators involved in the area of international taxation (tax treaty negotiators, officials dealing with the interpretation and application of tax treaties and tax auditors dealing with multinational enterprises).

9. Auditing Small and Medium Sized Enterprises

The objectives of this seminar are to discuss strategies to combat domestic tax abuses and to discuss the roles of the audit process within these overall strategies with respect to small and medium sized businesses.  The seminar will include discussions of risk identification, resource planning, communications with the taxpayer, the preparation of an audit, the audit work programme, reporting and final assessment. Dialogues on taxpayers' rights and obligations, on appropriate legislation and basic audit theory will also be included in this workshop. A significant part of the seminar will be devoted to practical cases to allow participants to familiarise themselves with the common practical audit tools and techniques.  The practical cases will also deal with the auditing of electronic records.  The main purpose for this event is to provide the participants with a sound understanding of tax audits and a comprehensive toolkit for auditing. At the same time, the participants will be encouraged to develop a creative approach to deal with most domestic audit cases as well as with problems of the shadow economy.

Target Audience: Tax auditors as well as policy makers who are interested in audit practices.

10. Tax Policy Analysis

The seminar on tax policy analysis will cover policy considerations (e.g. efficiency, equity) relevant to a number of topics of interest to senior tax policy makers.  It is anticipated that the topics considered in this workshop will evolve from year to year, at least in part, to cover policy areas of current and particular interest to OECD and non-OECD countries alike.  For example, the workshop could focus on the following areas: i) linkages between taxation (mainly corporate income tax) and domestic and foreign direct investment; ii) taxation of stock options; iii) environmental (or ‘green’) tax reforms; iv) taxation and savings; v) taxation and employment.  Participants are encouraged to draw to the attention of the workshop organizers other topics that they would like to see covered.  Case study analysis and presentations are also encouraged.

Target Audience: senior tax policy makers who are actively involved in debating and designing tax policies in their economies.

11. Tax Policy Modelling

The purpose of this workshop, aimed at early-career economists, is (i) to provide participants with a working knowledge of micro-simulation principles and techniques in modelling the revenue impacts of tax policy changes, in the areas of personal income tax, corporate income tax, and value-added tax, including the establishment of a database; (ii) to oversee “hands-on” application by participants of micro-simulation techniques; (iii) to provide participants with an overview of measurement issues and policy uses of marginal and average effective tax rates; and (iv) to establish a network of model builders and users which may be useful for participants when practical problems arise.

Target Audience: Participants should be early-career tax policy economists involved in tax modelling in the central government’s Ministry of Finance (or in the Ministry responsible for providing tax modelling services to the Ministry of Finance).  Participants should also have a good knowledge of the basic design features of at least one of the following main tax bases -- personal income tax, corporate income tax, and value-added tax -- and some familiarity with spreadsheet analysis (e.g., Excel software.)

12. Income Tax

The purpose of this seminar on income tax is to discuss significant tax policy issues in a multilateral setting and to share country experiences on these issues.  The content of this workshop is decided on an event by event basis, in consultation with the participants from Non-OECD economies.  The taxation topics that are covered by this workshop will change from year to year.  Some of the topics that have been discussed in previous years include taxation of re-organizations, flat vs. progressive personal income tax rates, EU Directives, tax treatment of revaluation of assets, derivatives and options, etc.  Participants are invited to present their country experiences and practical cases relevant to the topics for discussions.

Target Audience: policy-makers and senior administrators involved in tax reforms.

13. Taxation of Non-Residents

This seminar examines the major issues of taxing non-residents as an aid to understanding and developing the correct policies dealing with non-residents.  Although the seminar draws on the best practices of OECD countries with the taxation of non-residents, the special concerns of the participants are emphasised throughout the seminar. Topics to be discussed will include:

• Definition of resident and non-resident individuals and legal persons, including the tax concept of permanent establishment
• Overview of the taxation of sources of income of individuals and legal persons
• Analysis of the most common forms of tax avoidance and evasion by non-residents and possible anti-abuse rules to counter the schemes and
• Review of administrative aspects of taxing non-residents, including filing, withholding and reporting requirements.

Target Audience: Senior tax policy-makers and administrators responsible for designing and assessing tax laws concerned with non-residents.