Platform for Collaboration on Tax shifts priorities in response to global tax deal

By Doug Connolly, MNE Tax

The Platform for Collaboration on Tax – a joint initiative of the OECD, United Nations, International Monetary Fund, and World Bank Group – is reevaluating its international tax priorities in light of the Inclusive Framework agreement reached earlier this month, as well as the economic impacts of Covid-19, according to the PCT’s 2021 progress report released October 20.

Given the progress of the Inclusive Framework in reaching the October 8 agreement, the PCT no longer plans to produce content on the benefits of a multilateral approach to international tax issues. To focus on more forward-looking work, it is also shelving planned work on information exchange between PCT partners with respect to impact assessments related to the OECD’s base erosion and profit shifting (BEPS) project.

The PCT has several other projects within its international tax workstream that it still plans to focus on. One potential international tax project being considered is a new review paper on how to support the development of more effective tax systems. It’s been ten years since the group last issued such a report in 2011. In the final months of 2021, the PCT also plans to take up a review of possible further guidance for low-income/low-capacity countries with respect to the OECD BEPS process and associated concerns and priorities.

Work is also ongoing on a couple of projects already underway. The PCT continues to work on more accessible e-learning versions of its toolkits that will build on and complement the existing versions. Earlier this year, the PCT released toolkits on transfer pricing documentation and negotiating tax treaties. PCT also continues to develop several country case studies on taxation of government-to-government aid.

In shifting its focus going forward, PCT plans to engage in internal and external consultations to evaluate how priorities have evolved for developing countries amid the changing international tax landscape and, in light of that, what types of toolkits or other technical guidance would be most helpful.

In general, through its international tax workstream, the PCT seeks to produce guidance on complex international tax issues with a focus on assisting developing countries, as well facilitating developing country participation in international tax debates and implementation of international agreements.