“Fair play” - the rule of the game in international taxation: Remarks at Antalya G20 Summit session on enhancing resilience
Remarks by Angel Gurría,
Antalya, Turkey, 16 November 2015
(As prepared for delivery)
President Erdogan, dear Leaders:
Today, you have in front of you, for your implementation and enforcement, a package of measures designed to make sure that everybody, including multinationals, pay their fair share of taxes to finance public needs and to adapt our tax rules to a digital and globalised economy. Your teams and the OECD have delivered on the G20/OECD BEPS Action Plan, with the aim of reversing revenue losses in the public coffers of up to a quarter trillion US dollars annually.
Thanks to your leadership “fair play” will become the name of the game in international tax policies. With the set of agreed measures, the location of the profits of multinationals and where they pay their taxes will be the same as the location of the activities generating these profits. New rules which will bridge the gaps between tax sovereignties and international tax instruments were fixed to close loopholes in transfer pricing and end treaty shopping. Finally, more transparency will allow tax administrations to see where activities take place and where the profits are booked.
Now it is the time to move to three ”I”s for taxation: implementation, implementation, implementation – although not necessarily in that order. We have been working on and will deliver an inclusive framework, with G20, OECD and all interested developing countries participating on an equal footing! I would like to thank the EU Commission for the directive which will quickly implement the automatic exchange of tax rulings, as agreed in the G20/OECD BEPS Project. We also already have around 100 countries negotiating a multilateral treaty to streamline the implementation of BEPS. To address this challenge, we will leverage on the successful combination of G20 political support and guidance and OECD expertise.
This was the case with our work on tax transparency and the end of bank secrecy. As you know, our Global Forum now includes 130 countries and it has delivered major progress towards tax transparency with all countries adapting their legislation. There are no more non-compliant jurisdictions and already 96 countries have committed to implementing automatic exchange of information by 2017 and 2018. More will join in the near future. There will be “nowhere to hide”.
These changes are not theoretical. Not only do they bring more fairness but they also bring more revenues: 48 billion euros have already been collected by governments through voluntary disclosures mechanisms drawing on the upcoming automatic exchange of information [which is by the way more than 125 times OECD’s budget]. And we are still two years away from full implementation, so more will come. The tax payers have come to the conclusion that change is inevitable and they want to avoid harsher sanctions.
Finally, in support of the need to mobilise domestic resources, particularly in developing countries, and help their tax authorities to deal with the army of lawyers, accountants and tax experts of multinational enterprises, the OECD has been actively promoting the Addis Ababa Agenda. With Helen Clark, head of UNDP, we launched the Tax Inspectors Without Borders Initiative, with a number of pilot projects already under way, e.g. in Kenya, Colombia, Ghana and Senegal. We stand ready to work with all the IOs around the table so that developing countries fully profit from the changing international tax environment.
In spite of the sceptics, the pushbacks, the attacks and the threats, the international tax agenda has moved in record time, thanks to the combination of the political leadership you provide and the technical skills the OECD brings. As President Obama said last year in Brisbane: “Our tax work is the G20 at its best”.