Remarks by Angel Gurría
Buenos Aires, Argentina - 22 July 2018
(As prepared for delivery)
Ministers, Central Bank Governors,
On tax matters, thanks to the support of Leaders and Finance Ministers, major progress has been achieved which has demonstrated that international cooperation, in a multilateral framework, can support and strengthen national sovereignty.
On tax transparency, international cooperation today is far better than could have been imagined just a few years ago. You demanded that countries automatically exchange financial account information – this is becoming a reality. In fact, as a result of voluntary compliance mechanisms and offshore investigations put in place since 2009, and particularly in anticipation of the beginning of automatic exchange of information last September, jurisdictions around the globe have received 93 billion euros in additional revenue. That is real money for hospitals, schools and other vital public services.
When some started lagging in putting their commitments on tax transparency into action, you asked the OECD to establish criteria to identify those not performing well enough. You have now asked for recommendations on how to strengthen these criteria so that they remain a lever for progress. I am pleased to deliver to you today updated criteria. We will report to the Leaders at their summit this year on the number of non-compliant countries and names (hopefully none) will follow in June next year along with a report on the progress made.
Progress on BEPS implementation continues. The time when MNE’s could use tax planning-based on a lack of transparency or the exploitation of cross-border loopholes to avoid paying their fair share of tax, is over. 175 harmful preferential tax regimes have been reviewed by the OECD/G20 BEPS Inclusive Framework and changes to more than 130 are underway or already completed. Information on 17 000 tax rulings has already been identified and exchanged. The exchange of Country-by-Country Reports, requiring the largest MNEs to provide tax administrations with a complete and coherent picture of their tax situation, has started.
Most importantly, taxpayers are changing their behaviour. A significant number of MNEs have already reported taking steps to align their tax structures with their real economic activity.
More work needs to be done. In March of 2018, I delivered the OECD’s Interim Report on the Tax Challenges Arising from Digitalisation. You will recall that the report showed differences of opinion both on the nature of the problem and on how it could be tackled. But all 116 members of the OECD/G20 BEPS Inclusive Framework agreed to work towards a consensus-based solution. A meeting held only a few days ago allowed countries to refine their positions to bridge the gaps between them and identify a clear way forward. This was a very positive sign. I urge countries to maintain such a spirit of compromise. The stakes are high and we all stand to benefit greatly by finding common ground. I will be updating you regularly on the progress towards a long-term solution in 2020. Clearly, the faster we converge on the what, the how, the when and the how much about digital taxation, the faster we can define a common roadmap towards implementation of a policy whose main tenet we all support: all companies pay their fair share of taxes.