{"id":21630,"date":"2013-07-19T08:59:39","date_gmt":"2013-07-19T07:59:39","guid":{"rendered":"http:\/\/www.taxresearch.org.uk\/Blog\/?p=21630"},"modified":"2013-07-19T09:03:03","modified_gmt":"2013-07-19T08:03:03","slug":"the-oecd-admits-it-has-failed-to-tackle-the-problems-in-the-international-tax-system","status":"publish","type":"post","link":"https:\/\/www.taxresearch.org.uk\/Blog\/2013\/07\/19\/the-oecd-admits-it-has-failed-to-tackle-the-problems-in-the-international-tax-system\/","title":{"rendered":"The OECD admits it has failed to tackle the problems in the international tax system"},"content":{"rendered":"<p>I <a title=\"The OECD admits it has failed to tackle the problems in the international tax system\" href=\"http:\/\/www.taxresearch.org.uk\/Blog\/2013\/07\/19\/the-oecd-admits-it-has-failed-to-tackle-the-problems-in-the-international-tax-system\/\" target=\"_blank\">have already written<\/a> about the fact that the OECD has, in the\u00a0first\u00a0chapter of its\u00a0Base Erosion and Profits Shifting (BEPS) report accepted that this is a big issue, much along the lines that the tax justice and NGO community has argued. I have welcomed that.<\/p>\n<p>There are other\u00a0welcome\u00a0admissions in the report. For example, this statement in chapter 2:<\/p>\n<blockquote><p>BEPS \u00a0 relates \u00a0 chiefly \u00a0 to \u00a0 instances \u00a0 where \u00a0 the \u00a0interaction \u00a0of \u00a0different \u00a0tax \u00a0rules \u00a0leads \u00a0to \u00a0double \u00a0non-\u00adtaxation \u00a0or \u00a0less \u00a0than \u00a0 single \u00a0taxation. \u00a0It \u00a0also \u00a0relates \u00a0to \u00a0arrangements \u00a0that \u00a0achieve \u00a0no \u00a0or \u00a0low \u00a0taxation \u00a0 by \u00a0 shifting \u00a0 profits \u00a0 away \u00a0 from \u00a0 the \u00a0 jurisdictions \u00a0 where \u00a0 the \u00a0 activities \u00a0 creating \u00a0 those \u00a0profits \u00a0take \u00a0place. \u00a0No \u00a0or \u00a0low \u00a0taxation \u00a0is \u00a0not \u00a0<i>per \u00a0se<\/i> \u00a0a \u00a0cause \u00a0of \u00a0concern, \u00a0 but \u00a0it \u00a0becomes \u00a0so \u00a0when \u00a0it \u00a0is \u00a0associated \u00a0with \u00a0practices \u00a0that \u00a0artificially \u00a0segregate \u00a0 taxable \u00a0income \u00a0from \u00a0the \u00a0activities \u00a0that \u00a0generate \u00a0it. \u00a0In \u00a0other \u00a0words, \u00a0what \u00a0creates \u00a0 tax \u00a0 policy \u00a0 concerns \u00a0 is \u00a0 that, \u00a0 due \u00a0 to \u00a0 gaps \u00a0 in \u00a0 the \u00a0 interaction \u00a0 of \u00a0 different \u00a0 tax \u00a0 systems, \u00a0and \u00a0in \u00a0some \u00a0cases \u00a0because \u00a0of \u00a0the \u00a0application \u00a0of \u00a0bilateral \u00a0tax \u00a0treaties, \u00a0 income \u00a0 from \u00a0 cross-\u00adborder \u00a0 activities \u00a0 may \u00a0 go \u00a0 untaxed \u00a0 anywhere, \u00a0 or \u00a0 be \u00a0 only \u00a0 unduly \u00a0lowly \u00a0taxed.<\/p><\/blockquote>\n<p>Again, this reflects much that I have argued. It is not low tax rates per se that makes a tax haven harmful, it is the secrecy that permits profit shifting into the tax haven without being detected that is harmful. This is another welcome admission by the OECD.<\/p>\n<p>So is this:<\/p>\n<blockquote><p>There \u00a0are \u00a0gaps \u00a0and \u00a0frictions \u00a0 among \u00a0 different \u00a0 countries\u2019 \u00a0 tax \u00a0 systems \u00a0 that \u00a0 were \u00a0 not \u00a0 taken \u00a0 in \u00a0 account \u00a0 in \u00a0 designing \u00a0the \u00a0existing \u00a0standards \u00a0and \u00a0which \u00a0are \u00a0not \u00a0dealt \u00a0with \u00a0by \u00a0bilateral \u00a0tax \u00a0 treaties.<\/p><\/blockquote>\n<p>Absolutely\u00a0right. That's why we're in the mess we are.<\/p>\n<p>It is then frustrating that the OECD then fail to rise to the challenge of tackling these issues, as my next blog discusses.<\/p>\n<p>&nbsp;<\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>I have already written about the fact that the OECD has, in the\u00a0first\u00a0chapter of its\u00a0Base Erosion and Profits Shifting (BEPS) report accepted that this is<br \/><a class=\"moretag\" href=\"https:\/\/www.taxresearch.org.uk\/Blog\/2013\/07\/19\/the-oecd-admits-it-has-failed-to-tackle-the-problems-in-the-international-tax-system\/\"><em> Read the full article&#8230;<\/em><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[64,78,10],"tags":[],"class_list":["post-21630","post","type-post","status-publish","format-standard","hentry","category-corporation-tax","category-oecd","category-tax-avoidance"],"_links":{"self":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/21630","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/comments?post=21630"}],"version-history":[{"count":0,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/posts\/21630\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/media?parent=21630"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/categories?post=21630"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.taxresearch.org.uk\/Blog\/wp-json\/wp\/v2\/tags?post=21630"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}