United Kingdom

Keynote Address to the International Fiscal Association Congress: “Towards the Third Big Bang”


Remarks by Angel Gurría

OECD Secretary-General

8 September 2019 - London, UK

(As prepared for delivery)



Ladies and Gentlemen:

It is a pleasure to be here at the 73rd Congress of the International Fiscal Association among so many dedicated and passionate tax practitioners. Tax is at the heart of the OECD’s policy agenda, and we are counting on your continued support as we strive to make the global tax system fairer, more efficient, and equipped for an increasingly digitalised world.


The OECD is working hard to modernise the global tax system

The tax historians among us will recall that, in the early 20th century, experts from the League of Nations developed several drafts of tax treaties that later became the “London Model” tax convention of 1946. The London Model served as the principal model framework for tax treaties until 1963, when the OECD Model Tax Convention was first published.

But a lot has changed since 1946!

While the League of Nations provided a sound basis for distinguishing between “residence” and “source” taxation for the global economy in the mid-20th century, it did not anticipate one important development: the Internet, and digitalisation more generally.

So now, 73 years later, we find ourselves back in London, grappling with the tax challenges arising from the digitalisation of the economy. The original BEPS Action 1 Report analysed these challenges, but not all countries were ready to tackle them back in 2015. Are they ready now?
The recent spate of unilateral actions, coupled with strong calls by the G20 and G7 for the OECD to find a global, consensus based solution by 2020 suggest they are. This is good news, and the OECD is working hard to deliver on this mandate.


Two OECD-led “big bangs” have transformed the global tax landscape

Before we dive into the digital tax agenda, allow me to review two “big bang” developments that have transformed the global tax landscape in recent years and proven the merits of the OECD’s multilateral approach to combatting tax evasion and avoidance.

The first “big bang” happened in tackling bank secrecy for tax purposes. Thanks to OECD led efforts over many years, all financial centres are now engaged in the automatic exchange of financial account information (through the OECD’s Common Reporting Standard – CRS). Today, more than 4,500 exchange of information agreements are in force, with 90 jurisdictions implementing the CRS in 2018. 

Our collective efforts have generated revenues, delivered results, and improved transparency:

  1. The Revenues: In the lead-up to implementation of the CRS, governments identified and collected over EUR 95 billion in additional tax revenues from voluntary disclosures and offshore investigations.

  2. The Results: Countries have reported that information on 47 million offshore accounts – with a total value of almost EUR 5 trillion – were exchanged for the first time in 2018.

  3. Transparency: OECD analysis shows that bank deposits in international financial centres fell by around 34% over the past ten years, representing a decline of USD 551 billion. Specifically, the OECD led Automatic Exchange of Information standard has resulted in a decline of 20% to 25% in bank deposits in these international financial centres over the past decade.

The second “big bang” was the delivery of the OECD-G20 BEPS package in 2015. This work was motivated by significant revenue losses from base erosion and profit shifting, conservatively estimated at up to USD 240 billion annually (or up to 10% of global corporate income tax revenues). Implementation of the four minimum standards in the BEPS package is now in full swing.

When the OECD was in the midst of this massive undertaking, there were some who doubted, criticised and questioned our ambitious timeframe to produce the BEPS package. But we delivered, and part of the reason we were able to do so was the active involvement of stakeholders like yourselves.

Our fight against tax evasion and avoidance is continuing. The 134 members of the OECD G20 Inclusive Framework on BEPS are working to put an end to harmful tax regimes and are exchanging information on previously secret tax rulings. Over 280 regimes have been reviewed, and all those identified as harmful have been amended or abolished. Over 21,000 tax rulings have already been exchanged between tax administrators.
The BEPS Multilateral Instrument (MLI) – the innovative outcome of work on BEPS Action 15 – has been used to swiftly implement treaty-related anti-BEPS measures. To date, the MLI has been signed by 89 jurisdictions, of which 85 are members of the Inclusive Framework. More are expected to sign the MLI in the future.

Work under the minimum standard of BEPS Action 14 to improve the timeliness, effectiveness and efficiency of dispute resolution procedures is also advancing. Over 45 jurisdictions have been peer reviewed so far, with many making good progress.


Work is underway to deliver the next “big bang” for the global tax system

While the OECD has the best and the brightest working to strengthen the global tax system, we continue to count on the expertise, perspectives and feedback of tax experts like yourselves to dig down into the roots of tax policy. Your engagement is particularly important as we work to deliver the third “big bang” in the global tax system – addressing the tax challenges of the digitalisation of the economy.

As I mentioned earlier, the G20 has mandated the OECD, working through the Inclusive Framework on BEPS, to address these challenges by 2020. And several days ago, in Biarritz, G7 Leaders pledged “to reach an agreement in 2020 to modernise international taxation within the framework of the OECD.” France has committed to withdraw its unilateral measure – the Digital Services Tax (DST) – once this agreement has been reached. Any DST paid would be deducted from what companies would owe under the new tax rules. The risk of further unilateral measures will remain until a multilateral agreement is finalised.

So the stakes are high and the pressure is on! We took an important step forward last May, when the 129 Members of the OECD G20 Inclusive Framework adopted a Programme of Work based on two pillars. Given this room is full of tax experts, I have no doubt that you all have read every word of this Programme! But let me recap briefly:


  • The first pillar focuses on the allocation of taxing rights regarding nexus and profit allocation, with three different proposals that would modify the existing rules based on the concepts of “user participation”, “marketing intangibles” and “significant economic presence”.

  • The second pillar proposes a global anti-base erosion mechanism that serves as a backstop to the first pillar. It would give jurisdictions the right to ensure a minimum level of tax where income is subject to no, or very low, taxation.

These measures would lead to a fairer tax system. The framework, once agreed, would apply to all Members of the Inclusive Framework, reducing gaps in effective tax rates paid by domestic and international firms.

Now is the time to enhance tax certainty.

Enhancing tax certainty: redoubling our efforts

Given the seismic shifts underway in the international tax arena, redoubling our efforts to enhance tax certainty is critical. In this spirit, the OECD is working on a variety of initiatives, including the International Compliance Assurance Programme (ICAP) and joint audits.

And we should not forget the important role that our capacity building efforts play in furthering tax certainty. The OECD-UNDP Tax Inspectors Without Borders Initiative is a prime example. TIWB allows experienced auditors to work side by side with auditors from developing countries.

This ensures that the international tax rules are applied consistently, fostering greater tax certainty, and prevents malicious tax practitioners from helping multinationals to shift their profits to low, or no tax jurisdictions. It also delivers great results for developing countries: additional tax revenues raised by developing countries through TIWB programmes stand at USD 445 million. This represents outstanding value for money: for every USD 1 spent on operating costs, TIWB generates over USD 100 in additional tax revenues. We aim to have up to 100 different country programmes by next year, with the corresponding benefits to participants. I can see no better way to use at least part of ODA money.

Ladies and Gentlemen:

International tax policymaking benefits greatly from the input and expertise represented by all of you in this room. Your support was essential in delivering the G20-OECD BEPS package. Now your support will be crucial in finalising our work to address the tax challenges of the digitalisation of the economy. We count on you and we want you to count on the OECD. The world is counting on both of us. Let’s deliver!

I wish you all fruitful discussions and lively debates on the future direction of international tax policy. Thank you.



See also:

OECD work on Tax


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