Евразийский научно - исследовательский центр Eurasian Research Centre сравнительного и международного for Comparative and International Tax Law финансового права http://eurasiatax.com http://eurasiatax.com Action 15: Multilateral Instrument Prof. Dr. Danil Vinnitskiy Ural State Law University, Russia VI CONGRESSO BRASILEIRO DE DIREITO TRIBUTÁRIO INTERNACIONAL 19 – 20 August 2015 São Paulo, Brazil
Евразийский научно - исследовательский центр Eurasian Research Centre сравнительного и международного for Comparative and International Tax Law финансового права http://eurasiatax.com http://eurasiatax.com OUTLINE Part I. General observations 1. Introduction 2. Multilateralism in International Tax Law before BEPS 3. Developing a multilateral instrument in accordance with the BEPS Action Plan 4. Mandate to launch negotiations on a Multilateral Instrument 5. The precise content of a multilateral instrument? 6. The BEPS project: a threat for tax sovereignty of developing countries? 7. The key elements of multilateralism Part II. Conclusive remarks 8. Actions which per se do not require multilateral instrument 9. Areas of possible common interest (for developed and developing countries) 10. Areas of developed countries’ concern
I. INTRODUCTION 1. Multilateral conventions on the tax matters 2. Action Plan on Base Erosion and Profit Shifting (2013) 3. On 16 September 2014 the OECD released the report on Action 15 of the BEPS Action Plan: The report provides for an analysis of the tax and public international law issues related to the development of a multilateral instrument to enable countries that wish to do so to implement measures developed in the course of the work on base erosion and profit shifting (BEPS) and amend bilateral tax treaties. 4. On 6 February 2015 the OECD presented the latest developments in the OECD/G20 BEPS Project: Mandate to launch negotiations on a multilateral instrument to streamline implementation of tax treaty-related BEPS measures 5. On 28 May 2015 the OECD announced the countries that will participate in a meeting to begin substantive work on drafting a multilateral instrument under BEPS. Action 15: - 83 countries have expressed interest in joining the discussion - discussion will take place on 5 – 6 November 2015 - the Group will aim to conclude its work and open the multilateral instrument for signature by 31 December 2016. Евразийский научно - исследовательский центр Eurasian Research Centre сравнительного и международного финансового for Comparative and International Tax Law права http://eurasiatax.com http://eurasiatax.com
II.1. MULTILATERALISM IN INTERNATIONAL TAX LAW BEFORE BEPS 1. Multilateral conventions on tax matters at the regional level ― 2008 West African Economic and Monetary Union (WAEMU) Income and Inheritance Tax Convention; ― 2007 Ibero-American Social Security Convention; ― 2005 SAARC (South Asian Association for Regional Cooperation) Income Tax Agreement; ― 2004 Andean Community Income and Capital Tax Convention; ― 1994 CARICOM (Caribbean) Income Tax Agreement; ― 1990 Arab Maghreb Union Income Tax Convention. 2. 1988 OECD/Council of Europe Convention on Mutual Administrative Assistance in Tax Matters Евразийский научно - исследовательский центр Eurasian Research Centre сравнительного и международного финансового for Comparative and International Tax Law права http://eurasiatax.com http://eurasiatax.com
II.2. 1988 OECD/COUNCIL OF EUROPE CONVENTION ON MUTUAL ADMINISTRATIVE ASSISTANCE IN TAX MATTERS The Convention was developed jointly by the OECD and the Council of Europe in 1988 and amended by Protocol in 2010. The Convention is the most comprehensive multilateral instrument available for all forms of tax cooperation to tackle tax evasion and avoidance, a top priority for all countries. The Convention was amended to respond to the call of the G20 at its April 2009 London Summit to align it to the international standard on exchange of information on request and to open it to all countries, in particular to ensure that developing countries could benefit from the new more transparent environment. The amended Convention was opened for signature on 1 June 2011*. * (see OECD-1, News Convention on Mutual Administrative Assistance in Tax Matters June 2015) Евразийский научно - исследовательский центр Eurasian Research Centre сравнительного и международного финансового for Comparative and International Tax Law права http://eurasiatax.com http://eurasiatax.com
II.3. MULTILATERAL CONVENTIONS AND OECD MODEL COMMENTARIES (2014) - § 37. When preparing the 1963 Draft Convention and the 1977 Model Convention, the Committee on Fiscal Affairs considered whether the conclusion of a multilateral tax convention would be feasible and came to the conclusion that this would meet with great difficulties. It recognized, however, that it might be possible for certain groups of Member countries to study the possibility of concluding such a convention among themselves on the basis of the Model Convention, subject to certain adaptations they might consider necessary to suit their particular purposes. - § 38. The Nordic Convention on Income and Capital entered into by Denmark, Finland, Iceland, Norway and Sweden, which was concluded in 1983 and replaced in 1987, 1989 and 1996, [ 7]provides a practical example of such a multilateral convention between a group of Member countries and follows closely the provisions of the Model Convention. - § 39. Also relevant is the Convention on Mutual Administrative Assistance in Tax Matters, which was drawn up within the Council of Europe on the basis of a first draft prepared by the Committee on Fiscal Affairs. This Convention entered into force on 1 April 1995. § 40. Despite these two conventions, there are no reasons to believe that the conclusion of a multilateral tax convention involving all Member countries could now be considered practicable. The Committee therefore considers that bilateral conventions are still a more appropriate way to ensure the elimination of double taxation at the international level. Евразийский научно - исследовательский центр Eurasian Research Centre сравнительного и международного финансового for Comparative and International Tax Law права http://eurasiatax.com http://eurasiatax.com
III.1. DEVELOPING A MULTILATERAL INSTRUMENT IN ACCORDANCE WITH THE BEPS ACTION PLAN The Action Plan relies on different types of instruments for actions to be implemented: Domestic law changes; OECD Model Convention; OECD Model Convention Commentary; Multilateral instrument; The 15 BEPS Action Plan deliverables span three different areas*: 1. Recommendations for domestic law taking the form of best practices and model domestic rules; 2. Other reports, as well as changes to the OECD Model Tax Convention; 3. Internationally agreed guidance on implementation. See: OECD (2014), Developing a Multilateral Instrument to Modify Bilateral Tax Treaties, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing. http://dx.doi.org/10.1787/9789264219250-en, page 15 Евразийский научно - исследовательский центр Eurasian Research Centre сравнительного и международного финансового for Comparative and International Tax Law права http://eurasiatax.com http://eurasiatax.com
III.2. DEVELOPING A MULTILATERAL INSTRUMENT IN ACCORDANCE WITH THE BEPS ACTION PLAN : KEY BENEFITS (AN OECD APPROACH) Multilateral single legal basis for multi-country cooperation Wide scope extensive form of cooperation for all taxes reservation possible on certain issues Flexible a coordinating Body ensures a consistent Uniform application Евразийский научно - исследовательский центр Eurasian Research Centre сравнительного и международного финансового for Comparative and International Tax Law права http://eurasiatax.com http://eurasiatax.com
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