The International Monetary Fund (IMF), the Organisation for Economic Co-operation and Development (OECD), the United Nations (UN) and the World Bank Group (WBG) announced on 19 April 2016 the details of their joint effort to intensify their cooperation on tax issues: the Platform for Collaboration on Tax.

The Platform will not only formalize regular discussions between the four international organizations on the design and implementation of standards for international tax matters, it will strengthen their capacity-building support, deliver jointly developed guidance, and share information on operational and knowledge activities. 

This effort comes at a time of great momentum around international tax issues, and was welcomed by the G20 finance ministers at their February meeting in Shanghai. Amid the growing importance of taxation in the debate to achieve the UN Sustainable Development Goals (SDGs), a major aim of the Platform is to better frame technical advice to developing countries as they seek both more capacity support and greater influence in designing international rules.

Among the Platform’s first tasks will be to deliver a number of ‘toolkits’ designed to help developing countries implement the measures developed under the G20/OECD Base Erosion and Profit Shifting Project and on other international tax issues. The first of these toolkits, focusing on tax incentives, was delivered in November. There will be an important link to the new BEPS implementation framework. Platform members will hold regular meetings with representatives of developing countries, regional tax organizations, banks and donors. Consultations with business and civil society will be organized as needed.

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The Platform for Collaboration on Tax: Concept Note

Context and Background

A core agenda...

Strengthening tax systems – policy and administration – has emerged as a key development priority, being a core part of the Sustainable Development Goals (SDG) framework and the Addis Ababa Action Agenda. The international organizations (IOs)* already provide extensive support to countries’ tax efforts in capacity building, policy reform, standard setting and implementation, policy dialogue and knowledge sharing. Yet significant additional tax revenues, raised in fair and efficient ways, are required to meet the global development challenges. The IOs welcome the increased emphasis on taxation, recognize their responsibility to further support countries’ efforts, and see deepening their collaboration and cooperation as an essential component of strengthening tax systems.

At the same time, the increased linkages between economies and progress in reform that has already been made are making ever clearer the commonality of many of the challenges that advanced, emerging and developing countries face. This makes it ever more urgent to fully exploit the potential synergies from bringing more closely together the experiences and expertise that the IOs, with their different priorities and roles, have built up.

The IOs propose to create a new Platform as a central vehicle for their enhanced cooperation, enabling them to develop a common approach, deliver joint outputs, and respond to requests for a global dialogue on tax matters. This note describes the Platform, and how it will support the IO’s work in all their member countries.

…In a new environment

An era of unprecedented international cooperation on tax matters is now underway, boosted by progress on exchange of information since 2009 led by the OECD and Global Forum on Transparency and Exchange of Information for Tax Purposes and, more recently the G20/OECD BEPS Project, with more inclusion of developing countries in making significant changes to the international rules. This evolving environment is underpinned by a series of converging initiatives and actions, including the recent decision to enhance the resources of the UN Committee of Experts in order to strengthen its effectiveness. Other developments include a new joint IMF/WBG initiative on strengthening tax systems in developing countries and fostering inclusive policy discussions, a partnership between the OECD and UNDP on Tax Inspectors Without Borders plus the Addis Tax Initiative designed to dramatically increase donor support for building tax capacity in poorer countries.

…With new expectations for International Organisations

These converging developments are raising expectations, not least for coherent action among the IOs. G20 Leaders have called for the OECD to develop an Inclusive Framework for the implementation of the BEPS project globally, and welcomed support from the IMF, OECD, UN and WBG to help developing countries to voice their own perspectives and implement this agenda.

The IOs of course have their own mandates for action in the tax area. They have already received requests from the G20, notably on toolkits. A further G20 request for a report from the IOs on more general capacity issues on DRM and tax systems development has been received. These will require more joint efforts and more requests for collaborative work are anticipated. Developing countries themselves, particularly low income countries, are seeking both more capacity support and greater influence on designing international rules.

* IOs: For the purposes of this note, this refers to the International Monetary Fund (IMF), Organisation for Economic Co-operation and Development (OECD), United Nations (UN), and the World Bank (WB)

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BOX 1: The Platform and the Inclusive Framework – Links and Synergies

In response to the November 2015 call by G20 Leaders, the OECD is developing an Inclusive Framework for BEPS implementation. The Framework will monitor and support BEPS implementation, review progress made in the implementation of the BEPS measures and in particular of the minimum standards included in the BEPS package, and will complete some limited remaining technical work related to the BEPS Actions, (e.g. finalizing transfer pricing guidance on the application of transactional profit split methods on financial transactions). The Framework will include a mix of government tax officials from G20, OECD, and developing countries. The IMF, UN and WBG will be observers to the Framework, as is already the case in the OECD’s Committee on Fiscal Affairs.

The Platform will produce, as a major collective output of the IOs, the eight toolkits and reports that the G20 has requested the IMF, OECD, UN and WBG to develop. Most of these aim to translate the complexity of BEPS outcomes (in relation, for instance, to transfer pricing), into user friendly guidance for low capacity countries. Others address international tax issues not included in the BEPS project (such as indirect transfers of assets). The development of the toolkits will be informed by discussions in the Inclusive Framework. Beyond this, the Platform is also expected to identify and analyze emerging international tax issues, especially those of interest to developing countries including with a view to possibly bringing them to the attention of the Inclusive Framework.

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A positive starting point from which to deepen collaboration

There is already a strong basis on which to deepen collaboration among the IOs in pursuit of these increased expectations. Examples include the IOs’ effective collaboration on a recent report on tax incentives in low income countries and, earlier, on a flagship report for the G20 to identify the key tax challenges facing developing countries. Another instance is the joint work of the IMF and OECD on taxation and debt bias, part of a report on non-financial corporate leverage coordinated by the FSB for the G20.

Objectives

The overarching aim for cooperation among the IOs is to better support governments in addressing the tax challenges they face. The Platform will provide a means to help achieve this, by providing a structured and transparent framework for:

1. Producing concrete joint outputs and deliverables under an agreed work plan, implemented in collaboration by all or selected IOs, and leveraging each institution’s own work program and comparative advantage. The outputs may cover a variety of domestic and international tax matters.

2. Strengthening dynamic interactions between standard setting, capacity building and technical assistance (experience and knowledge from capacity building work feeding into standard setting and vice-versa, including timing of implementation).

3. Sharing information on activities more systematically, including on country level activities.

Principles to Guide Cooperation

The following key principles will guide cooperation among the IOs within the Platform:

1. The IOs will continue to act to fulfill their own mandates and within their own rules of procedure.

2. The substantive analysis, research, drafting of technical papers and the other activities undertaken within the Platform will be carried out by the staff of the IOs, based on their comparative advantages and capabilities. All of the Platform’s products will therefore be the responsibility of the IO staff involved, and not that of the Platform itself.

3. The cooperation will seek consensus, but differences in views may be reflected in the outputs where consensus cannot be found.