Tax

OECD/EU Seminar: Improving tax fairness and tackling tax evasion - a view from the EU Council Presidency and the OECD

 

Opening remarks by Angel Gurría,

Secretary-General, OECD

OECD, Paris, 7 December 2016,

(As prepared for delivery)

 

 

Dear Minister Kažimír, Dear Ambassadors, Dear Colleagues,

 

I am delighted to have this opportunity to discuss a topic that goes to the heart of the OECD’s mission, and to the heart of our collaboration with the Slovak Republic: improving tax fairness and tackling tax evasion.

 

This year, both the OECD and the Slovak EU Council Presidency have made an important contribution to making international taxation fair and effective.

 

A timely contribution

 

And this has been a timely contribution. High profile cases of tax evasion and corruption have shaken trust in public and private institutions, and there has been a justified call for action across the globe.

 

Governments urgently need to mobilise resources in the face of this tough economic recovery. As the OECD showed in our latest Economic Outlook, which we released only last week, global growth is still stumbling along at around 3%, trade growth is slower still, and inflation remains below target in most OECD economies. There can be no doubt about it: many of our countries are stuck in a low-growth trap. Public investment is part of the solution and for that governments need resources.

 

Not only are our governments confronted with the challenge of doing more with less, but they are also confronted with the challenge of winning back citizen trust in politics, in institutions, in companies, and in open markets. Instability and growing risks are fuelling uncertainty, especially for investors.

 

This is why action on the global tax agenda is critical to restoring trust, transparency and growth to the world economy.

 

The OECD has made a key contribution over the last year

 

The OECD reached a key milestone around one year ago, in October 2015, when it delivered a powerful set of measures (the BEPS Package) to empower all countries to tackle tax avoidance. Tax avoidance is a drain on our economies, which collectively costs as much 240 billion US dollars in lost revenues ─ or around 10% of global corporate tax revenues ─ every year! Over the course of this year we have been working on the implementation phase, starting with the establishment of the Inclusive Framework on BEPS.

 

I am pleased to tell you that, to date, there are already 90 Members of this Inclusive Framework, including the Slovak Republic and Malta, which is taking over the Presidency of the EU Council in the first half of 2017.

 

And less than two weeks ago, on 24 November, countries adopted the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS. More than 100 jurisdictions took part in the negotiations to agree on this multilateral instrument, which will save countries time by avoiding multiple bilateral negotiations and renegotiations, and ensure consistent implementation.

 

The OECD is also working on other fronts, developing with the G20 a new global standard for automatic exchange of information. It’s proving to be a game-changer in terms of deterring, detecting and addressing tax evasion. With the first automatic exchanges beginning in September 2017, including in the Slovak Republic, tax evaders are coming forward to declare previously undeclared accounts and assets. Countries have identified almost 55 billion euros in additional revenues through voluntary disclosure programmes and other initiatives targeting offshore evasion.

 

The Slovak Republic, in only six months has risen to the scale of this policy challenge, making international tax reform a pillar of its EU Presidency. 

 

Tax has been a pillar of the Slovak EU Presidency

 

First, let me emphasize how much has been achieved in just 6 months since the Slovak Republic took over the Presidency of the EU Council from the Netherlands on the 1st of July.

 

The Slovak Republic has led strong EU support in the implementation phase of BEPS. Thanks to the measures that have been championed by the Presidency of the Council and by the Commission, the EU member states are emerging as frontrunners in BEPS implementation. In particular, through the anti-tax avoidance package which champions core elements of the BEPS package – including country-by-country reporting, rules on interest limitation, exchange of tax rulings and CFC rules.

 

Under the Slovak Presidency, we have also seen greater emphasis given to the need to tackle tax crimes and other financial crimes, including the financing of terrorism. It is critical that we improve the effectiveness of inter-agency and international cooperation to ensure that tax administrations work effectively with each other and also with other relevant law enforcement agencies.

 

The efforts by the Slovak Republic to explore at the EU-level the merits of mandatory disclosure rules on intermediaries are impressive. Some advisors, lawyers, accountants and other service providers can act as promoters of schemes to circumvent transparency requirements. We must curtail these activities to get to the heart of financial crimes. Under the Slovak Presidency, the EU has also considered the means of improving inter-agency cooperation, and enhancing the ability of tax authorities to access relevant information quickly and effectively.

 

Ladies and Gentlemen, this is great progress! Let me congratulate Minister Kažimír and his government for these achievements and express my thanks for the intense and fruitful collaboration on the tax agenda. Together we are rewriting the rules of international taxation, and we will press ahead in the interests of all as we increasingly focus on implementation.

 

I am confident that we will work with Malta in the same spirit. This afternoon you will discuss Malta’s priorities on tax matters, including the implementation of the EU Anti Tax Avoidance Directive, and improving dispute resolution mechanisms to enhance tax certainty. You can count on the full support of the OECD!

 

Ministers, Ambassadors, thank you once again for your attendance today to move forward on this critical agenda. I wish you a rich and fruitful discussion. I now hand the floor to Minister Kažimír. Thank you. 

 

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