Addressing base erosion and profit shifting is a key priority of governments around the globe. In 2013, OECD and G20 countries, working together on an equal footing, adopted a 15-point Action Plan to address BEPS. Beyond securing revenues by realigning taxation with economic activities and value creation, the OECD/G20 BEPS Project aims to create a single set of consensus-based international tax rules to address BEPS, and hence to protect tax bases while offering increased certainty and predictability to taxpayers. A key focus of this work is to eliminate double non-taxation. However in doing so, new rules should not result in double taxation, unwarranted compliance burdens or restrictions to legitimate cross-border activity. This Explanatory Statement offers an overview of the BEPS Project and outcomes.
Prepared against this background, the OECD report Behind the Corporate Veil: Using Corporate Entities for Illicit Purposes opens ways to prevent and combat the misuse of corporate entities. The report shows that the types of corporate entities misused most frequently are those that provide the greatest degree of anonymity to their beneficial owners. With that in mind, the report offers governments and other relevant authorities a menu of policy options for obtaining information on the beneficial ownership and control of corporate entities in order to combat their misuse for illicit purposes.
Unemployment and related welfare benefits help prevent those without work from falling into poverty but at the same time reduce the incentive to work; this is one of the main dilemmas of social policy. For the first time, this publication analyses the complicated interactions of tax and benefit systems for many different family types and labour market situations. This volume enables the reader to discover exactly what features of the tax and benefit system cause disincentives to work; it compares all the different benefits made available to those without work and the taxes they pay with potential in-work incomes. In-work incomes in some countries are little higher than benefits made available to those without work. Furthermore, some benefits are withdrawn as earnings rise, reducing the attraction of moving up the job ladder. Unemployed families who face these disincentives may become locked in unemployment and are at risk of exclusion from the labour market.
Unemployment and related benefits help prevent those without work from falling into poverty but at the same time reduce the incentive to work; this is one of the main dilemmas of social policy. The Benefit Systems and Work Incentives series, started in 1998, addresses all the complicated interactions of tax and benefit systems for many different family types and labour market situations. This year's edition includes a section that describes the changes that occurred over the two-year period 1995-1997 affecting benefit systems and work incentives in OECD countries. We have also included some detailed calculations which illustrate the uses of net income calculations and the resulting marginal effective tax rates. Furthermore, Greece has now been included amongst the countries in our study. The series is a valuable tool used to compare the different benefits made available to those without work (net of taxes) with potential in-work incomes. This differential, in some countries, is very small. Furthermore, the reduction of certain benefits, as earnings rise, sometimes reduces the attraction of moving up the job ladder. Consequently unemployed families, who face these disincentives, may become locked in unemployment and are at risk of exclusion from the labour market.
Unemployment and related welfare benefits help prevent those without work from falling into poverty but at the same time, reduce the incentive to work; this is one of the main dilemmas of social policy. This annual report presents a description of all the benefits available to those without work, and of the taxes they pay, and presents a set of tables facilitating cross-country comparisons of tax-benefit systems. It compares the incomes of a range of families in and out of work in 1999 and describes the incentives to work, either part-time or full-time, across OECD countries.
Launched in 1998, this series (formerly entitled Benefit Systems and Work Incentives) addresses the complicated interactions of tax and benefit systems for different family types and labour market situations and their impact on household incomes and financial work incentives for an average production worker.
This new edition provides detailed descriptions of all cash benefits available to those in and out of work as well as the taxes they were liable to pay across OECD countries during both 2001 and 2002. Total household incomes and their components are calculated for a range of family types and employment situations. The results are used to examine financial incentives to work, either part-time or full-time, as well as the extent to which social benefits prevent income poverty for those without a job. This book also provides a detailed description of the personal tax systems of each OECD country.Launched in 1998, the latest edition of this series (formerly entitled Benefit Systems and Work Incentives) provides detailed descriptions of all cash benefits available to those in and out of work as well as the taxes they are liable to pay across OECD countries. A special chapter also compares childcare costs across countries and the financial work incentives faced by parents of young children. Using the OECD tax-benefit models, total household incomes and their components are calculated for a range of family types and employment situations. The results are used to examine financial incentives to work, either part-time or full-time, as well as the extent to which social benefits prevent income poverty for those without a job. This volume presents results for 2005 and earlier years.
Dispute prevention is a fundamental tenet of tax certainty. Bilateral Advance Pricing Arrangements (“BAPAs”), in a growing number of cases, have successfully contributed to providing advance tax certainty to both taxpayers and tax administrations, ensuring predictability in the tax treatment of international transactions. However, stakeholders have identified obstacles that prevent an optimal use of BAPAs. In continuing with its commitment to advancing the tax certainty agenda, the FTA MAP Forum, in conjunction with the FTA Large Business International Programme, has developed the Bilateral Advance Pricing Arrangement Manual (“BAPAM’) which is intended as a guide for streamlining the BAPA process. The BAPAM provides tax administrations and taxpayers with information on the operation of BAPAs and identifies 29 best practices for BAPAs without imposing a set of binding rules. As part of the BAPAM’s development, tax administrations have committed to assessing whether implementation of these best practices is appropriate, considering the circumstances of their own BAPA programme and the unique features of each BAPA application, so that the best practices are applied appropriately and with enough flexibility to improve current BAPA processes. The BAPAM also highlights what tax administrations expect from taxpayers in the BAPA process to facilitate a cooperative and collaborative process.
This Handbook is designed to raise the awareness of tax examiners and auditors of issues concerning bribery and other forms of corruption. It provides guidance on how to recognise indicators of possible bribery or corruption in the course of regular tax examinations and audits.
The report brings together evidence, international experience and policy insights for the design of housing policies. Emphasis is placed on three broad aspects: inclusiveness, efficiency and sustainability. Inclusive access to housing has become increasingly challenging in many OECD countries due to a large extent to rising housing costs, which reflects the failure of housing supply to meet demand, particularly in jobs-rich urban areas. Geographical constraints play a role, but in many cities regulations, including on land-use and zoning provisions, also constrain supply. At the same time, some regulations on tenant-landlord relations can discourage the development of rental markets, pushing up rents. Moreover, the transition to a low-carbon economy poses challenges for a sector that accounts for 17% of CO2 emissions and 37% of fine particulate matter emissions globally. Almost two-thirds of countries worldwide still lack mandatory building energy codes. Frontloading efforts is critical as dwellings have a very long lifespan. The report lays out evidence-based options for concerted policy action to address these challenges, while recognising complementarities and trade-offs amond the different objectives of housing policies. The report is part of the OECD Housing Tookit, which includes an interactive online dashboard of housing indicators and country snapshots.
This report addresses housing inequities through a series of analytical chapters and case studies. The cross-country chapters examine the effects of the COVID-19 pandemic on housing demand, develop a proposal for a green land value tax, evaluate the dynamics between fiscal autonomy and housing supply responsiveness, as well as explore the drivers of inter-regional migration. The case studies unravel the changes of Korea's progressive national property tax and a programme to address regional imbalances, assess the impact of the US property tax system on housing, dive into Norway's property taxation in relation to inequality, as well as survey Belgium's approaches to housing policy. With a blend of empirical data and critical analysis, the report underscores the pressing need for comprehensive strategies in addressing housing inequities. It also offers insights for policymakers and scholars, highlighting the complex balance between national and local housing policies.
Widespread voluntary tax compliance plays a significant role in countries’ efforts to raise the revenues necessary to achieve Sustainable Development Goals. As part of this process, governments are increasingly reaching out to taxpayers – current and future – to teach, communicate and assist them in order to foster a “culture of compliance” based on rights and responsibilities, in which citizens see paying taxes as an integral aspect of their relationship with their government. The emphasis placed by governments on taxpayer education and assistance helps bridge the gap between tax administrations and citizens, playing a key role – when properly implemented – in transforming tax culture.
Building on previous OECD analysis, this report aims to help tax revenue authorities in designing and implementing taxpayer education initiatives. It examines 140 initiatives under implementation in 59 developed and developing countries, offering a classification of different approaches to taxpayer education, and identifying common challenges and solutions. More generally, this report contributes to the OECD’s broader work on tax morale and seeks to encourage further research, debates and initiatives, particularly in developing countries, to better understand and ultimately strengthen tax morale and the tax compliance of taxpayers.
Now more than ever, governments are striving to mobilise greater tax revenue domestically. To do so, they are increasingly reaching out to inform and engage today’s – and future – taxpayers. They aim to foster an overall “culture of compliance” based on rights and responsibilities, in which citizens see paying taxes as an integral aspect of their relationship with their government. Taxpayer education is the bridge linking tax administration and citizens and a key tool to transform tax culture. Covering innovative strategies in 28 countries, this publication offers ideas and inspiration for taxpayer education, literacy and outreach. It helps revenue authorities in developing countries to strengthen the tax morale and tax compliance of their citizens.
This book analyses the role banks play in the provision of aggressive tax planning arrangements. It examines the nature of banking, the complex structured financing transactions developed by banks and how they are then used by both banks and their clients. It also explores the internal governance processes that banks use to manage tax risk and the prevention, detection and response strategies applied by different revenue bodies in responding to the challenges that banks pose. The book makes a number of recommendations for revenue bodies and identifies best practices for consideration by banks.
Many countries will likely face the need to increase tax revenues, as part of fiscal consolidation, during the next few years. But how is this best done? And what are the considerations when choosing between raising tax rates and broadening the tax base by scaling back or abolishing targeted tax provisions (such as allowances, exemptions and preferential rates)? This report aims to answer such questions by taking a close look at the economic and political factors that influence governments’ tax decisions.
Although many countries have broadened their tax bases over the past 30 years, targeted tax provisions, notably tax expenditures, continue to be significant. Like public expenditure, targeted tax reliefs mean that (other) tax rates need to be higher in order to finance these reliefs. This report therefore discusses whether such tax provisions continue to be worthwhile. It includes an annex covering country-specific revenue forgone estimates of tax expenditures for selected OECD countries.
This report also identifies political factors, including the lobbying of influential interest groups, as the main obstacles to base-broadening reforms, and it considers how reforms can be best packaged and presented to overcome such obstacles.
This report provides a broad and evidence-based analytical perspective of the debate around the possible role of a Border Carbon Adjustment (BCA) to deal with climate change. The new context of divergent climate ambition has led to a resurgence of interest in BCAs. The paper provides an overview of different policy instruments that can limit carbon leakage, with a particular focus on the BCA option, and offers a technical review of the literature and of the legal specificities around BCA as well as of alternative instruments. The report also analyses the issue of fragmented climate policies in the broader perspective of the trade-climate nexus and discusses how other policy measures – especially those related to trade – can help support climate objectives (for example, reducing the existing barriers to trade in environmental goods, and removing environmentally harmful and trade distortive subsidies).
This report examines the relationship between large business taxpayers and revenue bodies, five years on from the publication of the FTA’s Study into the Role of Tax Intermediaries. The study recommended that revenue bodies develop a relationship based on trust and co-operation. The report is based on a detailed examination of the practical experiences of countries that have established this type of relationship.
The report finds that the pillars of an improved relationship highlighted in the Study remain valid. However, it identifies some additional features that are equally important: the part played by the tax control framework used by a large business in providing an objective basis for trust is emphasised. It also suggests that “co-operative compliance” is a better description of the recommended approach than the original “enhanced relationship” label.
The report addresses some questions that have been raised about the compatibility of the new approach with certain legal principles and discusses the internal governance of these programmes within revenue bodies. The importance of making a sound business case for the approach and how to measure the results of co-operative compliance programmes is addressed. The report concludes with some thoughts about the future direction of the co-operative compliance concept.
This report outlines the essential features of a Tax Control Framework (TCF) and addresses revenue bodies’ expectations of TCFs. It includes a discussion of the issue of materiality, as it is important to understand the relationship between what is material for the purposes of systems of control, such as the external audit of a multinational enterprise’s accounts, and what is material in terms of the tax liabilities arising from that enterprise’s activities in a particular country. It also discusses how revenue bodies could approach the task of testing the soundness of a TCF in any particular case and finally, sets out conclusions, recommendations and next steps.
This report examines effective communication strategies that tax administrations can use to assist small and medium-sized enterprises (SMEs) in fulfilling their tax obligations. It analyses the various tools and channels available to tax administrations and their respective roles. The report draws on examples from the OECD Forum on Tax Administration members and includes two detailed case studies. The report was drafted by officials from the United Kingdom’s HM Revenue and Customs, with support from the OECD Forum on Tax Administration's Community of Interest on SMEs.
This publication provides information about VAT and excise duty rates (for alcoholic beverages, mineral oil products and tobacco products) across the OECD. It also describes a range of taxation provisions in OECD countries such as the taxation of motor vehicles and outlines the preliminary findings of a study of taxes on environmentally relevant goods currently in progress.