Experts meet on international cooperation in tax matters
The 11th session of the UN Committee of Experts on International Cooperation in Tax Matters concluded in Geneva, Switzerland, on 23 October after five days of discussions and deliberations. The session was held three months after the adoption of the Addis Ababa Action Agenda at the Third International Conference on Financing for Development in July.
During the session, members of the Committee addressed a number of critical issues, including the tax treatment of fees for technical services, the negotiation of tax treaties, extractive industries taxation, exchange of information among tax administrations, and capacity building activities for tax administrations.
The Committee adopted a new Article on the taxation of fees for technical services to be included in the next update of the UN Model Double Taxation Convention between Developed and Developing Countries (UN Model). In addition, it adopted a new practical Manual for the Negotiation of Bilateral Tax Treaties between Developed and Developing Countries.
Members of the Committee also decided to establish two new subcommittees: (1) Subcommittee on Royalties, with the mandate to propose an update of Article 12 of the UN Model and its Commentary, particularly on the tax treatment of industrial, commercial and scientific equipment and software-related payments; and (2)Subcommittee on Mutual Agreement Procedures – Dispute Avoidance and Resolution, to study the topic, provide guidance and propose any necessary updates to the UN Model in that respect.
The Subcommittee on Extractive Industries Taxation Issues for Developing Countries presented its work on tax treaty issues and indirect sales of extractive interests. The Subcommittee will continue to produce practical guidelines for developing countries in this area, including on the tax treatment of decommissioning, VAT and re-negotiation of contracts.
The Subcommittee on Exchange of Information presented a draft “Code of Conduct” aimed to provide guidance for countries to cooperate in combating international tax evasion through enhanced transparency and exchange of information. Suggestions were made to improve it and a new draft will be presented at the next October session of the Committee.
The Committee also welcomed the work of the Financing for Development Office of UN-DESA in the area of capacity-building, including the production of a “Handbook on Selected Issues in Protecting the Tax Base of Developing Countries” and the rich programme of training workshops and other activities with the participation of developing countries, in collaboration with international and regional organizations.
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