ITICnet.org Weekly Round-Up

25 June 2021

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G20 Draft Communique Signals Endorsement of Global Minimum Tax

Earlier this week, Reuters reported that the G20 finance ministers are set to endorse the "core elements of the two pillars on the profit reallocation of multinational enterprises and the global minimum tax as set out in the statement released by the G20/OECD Inclusive Framework on Base Erosion and Profit Shifting (BEPS),” according to the draft communique for the upcoming G20 finance ministers meeting obtained by Reuters. With the meeting set for July 9-10, the draft communique calls on the "G20/OECD Inclusive Framework on BEPS to swiftly finalize the remaining technical work with a view to approving the framework for implementation of the two pillars by our next meeting in October.” [More Information via MNEtax.com]

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IMF Update

• Global Carbon Pricing: A recent IMF blog post by Vitor Gaspar and Ian Parry highlighted the new IMF staff paper, Proposal for an International Carbon Price Floor Among Large Emitters, and the critical need for "stronger and more coordinated action in the decade ahead...to keep alive the goal of restricting global warming to below 2°C." Of significance, the authors note that on an international level "a well-designed carbon price floor agreement would yield benefits to individual countries as well as to the collective. All participants would be better off from stabilizing the global climate system, and countries would enjoy domestic environmental benefits from curbing fossil fuel combustion—most importantly, fewer deaths from local air pollution."

• The Pandemic's Impact on Africa: During the recent African Development Bank Annual Meeting, IMF Managing Director Kristalina Georgieva spoke about the tough "road ahead" for Africa as the continent faces the fastest growth rate for new COVID cases and its negative impact on growth prospects. Most importantly, she points out three areas where international cooperation is needed "for the sake of Africa and for the benefit of the world:" (1) vaccinate 60% of the population by mid-2022; (2) safeguard debt sustainability; and (3) utilize transformative reforms to strengthen Africa's recovery and resilience.

• IMF Mission Updates: Over the past week, the IMF released mission updates for Azerbaijan, Croatia, Curaçao and Sint Maarten, Egypt, Kosovo, Mauritius, Serbia, Slovak Republic, and Togo.

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New OECD Publications

This week, the Organisation for Economic Co-operation and Development (OECD) released a number of new publications:

• Model Reporting Rules for Digital Platforms: International Exchange Framework and Optional Module for Sale of Goods provides an "international legal framework to operationalise exchanges of information collected under the Model Reporting Rules for Digital Platforms and an optional module to extend its scope." [More Information via MNEtax.com]

• VAT Digital Toolkit for Latin America and the Caribbean provides "detailed guidance for the successful implementation of a comprehensive VAT strategy directed at e-commerce. It is designed to help governments secure significant VAT revenues and to ensure a level playing field between brick-and-mortar stores and foreign online sellers." [More Information]

• Five new peer review reports "assessing the legal and regulatory framework against the international standard on transparency and exchange of information on request" (EOIR) were released for Antigua and Barbuda, Argentina, the Russian Federation, South Africa and Ukraine. [More Information]

• Tax Inspectors Without Borders published the statement of outcomes following its Experts Roundtable and Stakeholders Workshop earlier this month.

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UNCTAD Releases World Investment Report 2021

Earlier this week, the United Nations Conference on Trade and Development (UNCTAD) released its World Investment Report 2021. With global foreign direct investment dropping by "35 per cent in 2020," the report notes that "the fall was heavily skewed towards developed economies, where FDI fell by 58 per cent, in part due to corporate restructuring and intrafirm financial flows. FDI in developing economies decreased by a more moderate 8 per cent, mainly because of resilient flows in Asia. As a result, developing economies accounted for two-thirds of global FDI, up from just under half in 2019."

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EU Proposes "Broad Reform" to Modernize WCO

Following last week's ECOFIN meeting, the European Union released Towards WCO Modernization: Reforming the World Customs Organization, a new "initiative [aimed to] help strengthen the WCO's position as a key multilateral institution and help it address developments in today's ever-changing international trade environment more effectively, while supporting the green and digital transitions." [More Information]

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IOTA Holds Digital BEPS Forum

Earlier this month, the Intra-European Organisation of Tax Administrations (IOTA) held the Forum on Implementation of Measures to Counter BEPS for 165 participants from 35 countries "to share knowledge and experiences between IOTA member tax administrations, to identify best practices in the implementation of the BEPS Action Plan...[and] create opportunities for its members to work collaboratively towards meeting the emerging challenges of implementing the BEPS measures."

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Business Optimism and Economic Recovery

EY recently published an article highlighting the need for governments to support the current optimistic business environment to "boost much-needed tax revenues and help governments deliver on their post-pandemic goals." Noting the inclusion of "prudent macroeconomic policy that balances continued monetary and fiscal support for growth against the risk of inflation and public indebtedness," the author outlines eight steps for governments to take to nurture these optimistic sentiments...[to] "help them overcome their post-pandemic challenges and set a positive course for the future."

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Taxing Rights and Developing Countries

With the recent release of Martin Hearson's new book, Imposing Standards: The North-South Dimension to Global Tax Politics, Nana Ama Sarfo of Tax Notes analyzes the history of tax treaties and competing narratives about the interests of developed and developing countries, including the London and Mexico models that emerged in the postwar era.

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Country Updates

• Argentina Simplifies TP Reporting: MNEtax.com reported on Argentina's newly created "simplified regime for transfer pricing information reporting to alleviate the operational burden and costs for taxpayers that are considered low risk by the agency."

• Chile Tax Updates -- WHT and VAT Compliance: Two EY Global Tax News Updates highlighted recent announcements by the Chilean tax authorities regarding the country's new withholding tax rate rates and VAT compliance evaluations on foreign service providers.

• New TP Rules in Jordan: A recent EY Global Tax News Update reported on Jordan's new transfer pricing and country-by-country reporting rules set to go into effect on 7 July.

• Mexico Tax Developments: A recent ITR article discusses how the current labor reform underway in Mexico "will substantially alter how foreign investors do business."

  A recent EY Global Tax News Update provided further details on the new effective tax rate list published by the Mexican Tax Authorities (SAT) "for 40 different economic activities/industries, including mining, manufacturing, retail and wholesale businesses, financial and insurance services, and the automotive and pharmaceutical industries."

Fall 2019 Research Intern Position Available

Fall 2019 Research Intern (unpaid): ITIC’s Energy Growth and Security (EGS) Program

Location: DC or virtual. The intern can either work in Washington, DC, or remotely.

ITIC’s Energy Growth and Security (EGS) Program, headed by Dr. Ariel Cohen,  focuses on natural resources, infrastructure, and energy transformations unfolding in Eurasia, Europe, the Middle East, and around the world.  

The Research Intern will: work on high-level research projects, prepare research briefs, provide literature reviews, talking points, and prepare presentations while reporting to our senior staff. In particular, the Research Intern will focus on programs and projects dealing with international energy policy & markets. The suitable candidate will also be engaged in detail-oriented project management on a day-to-day basis, including document drafting, data gathering, entry, and analysis.

Other duties include organizing and attending conferences, workshops, panel discussions, and other events; administering long-term projects; supporting bids for new projects; as well as scheduling and administrative support.

Academic credit possible but must be discussed on case-by-case basis. Access to numerous networking opportunities, lectures, receptions and policy luncheons will be available. Graduate students and graduates are particularly welcome.

KNOWLEDGE & SKILLS REQUIREMENTS

* Superb on-line research skills (Internet, databases)

* Excellent, proven, native-level English writing and editing skills

* Microsoft Office high level fluency (Word, Access, Power Point, Excel)

* Interest/background in energy policy and/or Russia, Eurasia

* Russian, Turkish, and/or Arabic language skills a plus

* Superior organizational skills and demonstrated self-initiative and ability to complete    tasks with minimal supervision

To apply:

Please send your resume, 3 relevant writing samples, and dates of availability to James Grant (Program Manager) (jgrant@iticnet.org) with the job title in the subject line. Candidates will be selected on a rolling basis through the month of September. The position will be a four month commitment.

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The INTERNATIONAL TAX AND INVESTMENT CENTER (ITIC) is an independent, nonprofit research and education organization founded in 1993 to promote tax reform and public-private initiatives to improve the investment climate in transition and developing economies. ITIC serves as a clearinghouse for information on best practices in taxation and investment policy.

ITIC encourages tax, trade and investment policies that enhance economic growth in non-OECD countries by facilitating mutual understanding and trust between business and government through the ITIC “neutral table,” where stakeholders convene to discuss academic analyses, policy studies and international best practices. ITIC works with ministries of finance, customs services and tax authorities in 85 countries, as well as international and regional financial institutions engaged in tax policy and tax administration issues. ITIC’s analytic agenda, global thematic initiatives, regional tax forums, and capacity-building efforts are supported by dozens of corporate sponsors.

ITIC is an equal opportunity employer and actively seeks candidates from a diverse background. This is an unpaid position.

ITIC Featured in BRITACOM Special Edition Journal

A recent article by ITIC President Daniel Witt and Senior Advisor Hafiz Choudhury was featured in the BRITACOM special edition journal, Building a Growth-Friendly Tax Environment in collaboration with International Taxation in China.

The article, "Belt and Road Initiative: Removing Tax Obstacles and Strengthening Cooperation for Investments to Deliver Growth and Development," discussed tax issues in the region and how "BRI countries should be looking at ways to create a favorable investment climate without giving up too much tax revenue, and without placing burdens on tax administrations with scarce resources."