G20 finance ministers and central bank governors, during their July 23–24 meeting in Chengdu, China, approved a plan that sets out objective criteria to be used to label countries as “non-cooperative” for tax transparency purposes. The G20 officials also mandated that the OECD continue its work on issues of tax certainty and inclusiveness.
The criteria on tax transparency, outlined in an OECD report presented to the G20 ministers, will be used by the OECD to draw up a list of non-cooperative jurisdictions for the G20 summit in July 2017. The finance ministers said they would consider “defensive measures” against countries that are added to the list.
Under the plan, only countries that meet at least two out the following three criteria will be considered cooperative: the county must achieve a rating of “largely compliant” with respect to the exchange of information on request (EOIR) standard; must commit to the automatic exchange of information (AEOI) standard, with the first exchange by 2018; and must join the multilateral Convention on Mutual Administrative Assistance in Tax Matters or have a sufficiently broad network permitting both EOIR and AEOI.
Also, where a country is determined by the Global Forum on Transparency and Exchange of Information for Tax Purposes peer review process to be “non-compliant,” or is blocked from moving past phase 1, or where it was previously blocked from moving past phase 1 and has not yet received an overall rating under the phase 2 process, it will be considered a non-cooperative jurisdiction even if it meets two of the three criteria.
Developing countries that do not have financial centers would be excluded from the assessment.
The Global Forum is developing a process that will allow jurisdictions which receive a partially compliant or non-compliant rating in 2016 to have their progress recognized on a provisional basis by June 2017, pending the conclusion of a full peer review under the second round of reviews. The G20 ministers asked the OECD to report back by June 2017 on how the Global Forum will manage the country review process in response to supplementary review requests of countries.
Growth & tax certainty
The OECD had presented a paper, titled the Tax Design for Inclusive Economic Growth, during a ministerial-level G20 tax symposium hosted by the Chinese and German governments, just prior to the G20 ministers’ meeting.
The ministers, in a communique following the meeting, asked the OECD and the IMF to continue working on issues of pro-growth tax policies and tax certainty.
“We recognize the important role of tax policies in our broader agenda on strong, sustainable and balanced growth and of a fair and efficient international tax environment in diminishing the conflicts among tax systems. As highlighted in our discussion at the G20 High Level Tax Symposium, we emphasize the effectiveness of tax policy tools in supply-side structural reform for promoting innovation-driven, inclusive growth, as well as the benefits of tax certainty to promote investment and trade,” the G20 tax officials said.
See:
Related MNE Tax articles:
Be the first to comment