Tax in a Borderless World:
The Role of the OECD
IRS/George Washington University 20th Annual
International Tax Conference
Washington
December 13 & 14, 2007
By Jeffrey Owens, Director
Centre for Tax Policy and Administration
OECD
www.oecd.org/ctp
The OECD
December 13-14, 2007
• Membership: 3 NAFTA, 4 Asian-Pacific countries and 23
European countries
• Setter of “soft” and occasionally “hard” rules
• A forum for discussing the economic and social challenges
of interdependence and globalisation
• A provider of comparative data, analysis and forecasts to
underpin multilateral co-operation
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The Committee on Fiscal Affairs
December 13-14, 2007
What are we?
What do we cover?
How are we organised?
A forum for senior policy makers and
administrators
All international and related domestic tax issues
• Biannual meeting
• Eight subsidiary bodies
• Centre for Tax Policy and Administration
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The Committee on Fiscal Affairs
December 13-14, 2007
Subsidiary Body*
Area of responsibility
Working Party N°1
Tax Conventions and Related Questions
Working Party N°2
Tax Policy Analysis and Tax Statistics
Working Party N°6
Taxation of Multinational Enterprises
Working Party N°8
Tax Avoidance and Evasion
Working Party N°9
Consumption Taxes
Forum on Harmful Tax Practices
Addresses anti-competitive tax practices
and is working with tax havens to
improve transparency and to establish
effective exchange of information
Forum on Tax Administration
Focuses on taxpayer service and
compliance
Board for Co-operation with Non-OECD
Economies
Has the responsibility of supervising the
alignment between the co-operation
programmes with NOEs and the core
interests and expertise of the CFA
* Working Parties N° 3, 4, 5, 7 were abolished
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The Centre for Tax Policy &
Administration
December 13-14, 2007
What are we?
What do we do?
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Forty plus professionals grouped into 5 divisions:
Treaties/Transfer Pricing;
International Co-operation; Tax Policy;
Tax Administration; Outreach
• First Draft of reports for the CFA
• Advise other parts of OECD on tax related issues
(e.g R & D)
• Assist governments in their tax reforms
• Co-ordinate with other international
organisations
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Major outputs of the CFA
December 13-14, 2007
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Model Tax Convention
Transfer Pricing Guidelines
Standards on Exchange of Information
Best Practices Guidelines in Tax Administration
International VAT/GST Guidelines
Comparative Analysis and Statistics on Tax
Levels and Structures
• Anti-Bribery Convention
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How governments participate in the
OECD’s work
December 13-14, 2007
• Country ambassadors form Council of Ministers
who set overall policy
• Senior tax policy-makers and administrators are
delegates to CFA
• Technical experts (e.g. from Treasury and IRS)
are delegates to subsidiary bodies
• Joint secretariat / government experts seminars
with non-Member countries
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How do issues get onto the
OECD’s tax agenda?
December 13-14, 2007
• Politicians (Secretary-General meets Ministers, annual
ministerial, sector ministerials) e.g. tax and growth
• CFA delegates e.g. attribution of income to permanent
establishment, business restructuring
• Business (BIAC, associations, individual companies)
e.g. arbitration, CIV/REITS
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Business participation in OECD’s
tax work
December 13-14, 2007
• Business and Industry Advisory Committee to
the OECD (BIAC)
 United States Council for International Business
(USCIB)
• TAGs, BAGs, etc.
• Discussion drafts
• Public consultations
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Limited Membership, Global Reach
December 13-14, 2007
Why involve NOEs ?
• Global guidelines need global acceptance
• To assist in the development of their tax
systems
How ?
• Observers
• Developing partnerships
• Multilateral, regional and in-country
programmes
• Over 600 events with NOEs including
around 14,000 officials
Outcomes
• Twenty-five NOEs set out position on
Model. Many NOEs basing transfer pricing
legislation on 1995 Guidelines
• A more coherent global tax environment
for MNEs
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Enlarging the OECD
December 13-14, 2007
Current 30 Member countries account for
 60% plus of world’s GDP
 70% plus of inward and outward investment
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The Next Wave
December 13-14, 2007
• The five applicants: Estonia, Slovenia, Israel, Chile
and Russia
 A 2-5 year process
• And at the same time enhancing our involvement
with the BIICS (Brazil, India, Indonesia, China, South
Africa) with a view to possible accession
• Continued deepening of partnerships with many
other NOEs
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Candidate countries should commit
to the following core tax principles
December 13-14, 2007
• Eliminating international double taxation through
complying with the key substantive conditions
underlying the OECD Model Tax Convention;
• Eliminating double taxation through ensuring the
primacy of the arm’s length principle, as set forth in
the OECD’s Transfer Pricing Guidelines;
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Candidate countries should commit
to the following core tax principles (2)
December 13-14, 2007
 Engaging in effective exchange of information;
 Combating harmful tax practices;
 Eliminating double taxation through the development
and implementation of International VAT/GST
Guidelines.
Overall accession process provides opportunity to
achieve greater convergence with OECD core
principles
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The OECD in 2020
December 13-14, 2007
• All major economies
• Represented on all continents
• Accounting for 80 % of world’s GDP/Foreign Direct
Investment
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How can we respond to these
pressures?
December 13-14, 2007
(i)
Providing rules on what’s acceptable / unacceptable tax
practices to attract activities
(ii) Achieving a deeper understanding by governments of new
business models and by business of the concerns of
governments
(iii) Intensifying co-operation between governments to improve
international tax compliance and enhancing the relationship
between taxpayers and revenue bodies
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How can we respond to
these pressures (2)?
December 13-14, 2007
(iv) Achieving greater consistency in implementation of
guidelines, models, etc.
(v) Identifying best practices in tax administration
(vi) Developing an OECD set of guidelines on VAT
(vii) Providing more comparative analytical material to inform the
political debate on tax reform
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