G20 Finance Ministers and Central Bank Governors’ Meeting
Session VI: International Tax
Lead intervention by Angel Gurría,
24 July 2016
(As prepared for delivery)
We have already had a very fruitful discussion on tax matters yesterday at the Symposium, so I will just touch briefly on the key issues arising from it, before providing an update on some of the main developments since we last met in April.
The discussions at the Symposium offered many excellent examples and ideas of how we can use tax policy as part of the structural reform toolbox to foster innovation, support growth that is inclusive and resilient, as well as enhance trade and investment by providing greater certainty. These are issues which we have recently examined in our just-released publication "Tax Design for Inclusive Economic Growth". As Germany indicated in Minister Schäuble’s closing remarks, delivering a more certain investment environment through improvements in tax policy design and implementation will be a key focus of their presidency in 2017, and we will be delighted to work with them, and with all of you to deliver on that objective in the year ahead.
This new pillar of our tax work, however, should not distract from the critical implementation phase that we are now in with respect to both tax transparency and the measures to address BEPS. Recent weeks have seen progress on the transparency front. My report to you for this meeting sets out three objective criteria to identify non-cooperative jurisdictions with respect to tax transparency: the implementation of the Exchange of Information on Request (EOIR) standard, the implementation of the Automatic Exchange of Information (AEOI) standard and joining the multilateral Convention on Mutual Administrative Assistance in Tax Matters (multilateral Convention). We have also proposed related benchmarks and are proposing to develop a list based on those criteria for the 2017 Summit.
These proposals do have an impact, and it was with recognition of the pending application of those Objective Criteria, that at the end of last week, Panama took the first step to join the multilateral Convention on Mutual Administrative Assistance. In terms of delivering on their commitment to undertake automatic exchange of financial account information by 2018, this is a very big step forward, and we hope will be swiftly followed by completing the other necessary steps to full compliance.
On Friday the latest results of the Global Forum’s peer review process were announced showing that Panama is not the only country moving ahead on the transparency front. Further, tax commissioners from both OECD and G20 countries, agreed in May on the procurement of a common transmission system which is going to be a very cost-effective measure for the secure exchange of tax data. This will cover financial account information, but also other exchanges like the country-by-country reports that are part of the BEPS minimum standards. Let me recall that, to the benefit of our citizens and of our public finance, we have already generated around 50 billion euros in additional revenues before the imminent start of the new automatic exchange tax information in 2017.
On BEPS, and responding to your request in February, we held the inaugural meeting of the G20/OECD Inclusive Framework on BEPS at the end of June, in Kyoto. 85 countries and jurisdictions, advanced and developing economies, signed-up to implement the BEPS package, and also to take part, on an equal footing with OECD and G20 members, in the monitoring of BEPS implementation as well as the ongoing technical work. That marks a very big shift in terms of making global dialogue on international tax matters even more inclusive and I am very proud that we have delivered on that with your leadership. We anticipate at least another 10 countries to join by the end of the year.
On the Multilateral Legal Instrument, negotiations are also advancing, so that all countries can quickly implement the tax treaty-related BEPS measures by updating their network of bilateral agreements. There are 96 countries in that negotiation now, and if we are to deliver the final agreement by the end of the year as you requested, I do call upon you to drive the message home to your technical teams that we need to maintain focus on finding solutions to the remaining issues. This is another example of an inclusive G20/OECD-led process of global tax reform that will enhance tax certainty and transparency.
Thank you, Chair.