Volume 16, No.12 - December 2012

Trends and analysis

With a focus on new trends in migration

Expert Group Meeting on “New Trends in Migration: Demographic Aspects” will take place in New York on 3 December

Organized by DESA’s Population Division, the meeting will focus on internal and international migration trends and their relevance for development. It is held in preparation for the forty-sixth session of the Commission on Population and Development to be held in New York in April 2013.

The meeting will also inform the preparations for the 2013 High-level Dialogue on International Migration and Development and the follow-up to the implementation of the Programme of Action of the 1994 International Conference on Population and Development, to be held in 2014.

For more information:
Expert Group Meeting on “New Trends in Migration: Demographic Aspects”

E-Government as an enabler of collaborative governance

Expert Group Meeting on “2014 UN E-Government Survey: E-Government as an Enabler of Collaborative Governance” will be held at UN Headquarters in New York on 4-5 December

The Division for Public Administration and Development Management (DPADM) of DESA is organizing an Expert Group Meeting (EGM) on the topic “United Nations E-Government Survey: E-Government as an Enabler of Collaborative Governance”. 

The purpose of the meeting is to provide a forum for discussion to allow high-level world-wide experts to (a) exchange views on emerging trends and issues related to the thematic areas of 2014 UN E-Government Survey, with reference to the overall UN development agenda, (b) review and examine the Survey’s methodology, as well as (c) review and update the questionnaire. The experts will provide advice and recommendations on how to integrate these issues into the next edition of the UN e-Government Survey, which is a flagship publication of DESA. 

Indeed, this publication is among the top ten most viewed publications among over four hundred produced every year by the Department; has been translated in Chinese and is currently being translated in Arabic and Spanish. The Survey provides unique, global and up-to-date information about the e-government ranking of 193 Member States and highlights major emerging trends and issues, as well as good practices in the area of e-government development across the globe.

The Survey has become a major reference publication for decision-makers world-wide, and for numerous international and regional institutions working in this area. It is an important tool for capacity-building as Governments utilize the Survey in order to gauge information about their ranking and, based on their own needs, request DESA’s advisory services to support them in further building their own capacity. As a result of DESA’s capacity building activities in this area, several Governments have been able to perform better and deliver services in more efficient, accountable, transparent and citizen-centric manner, thus progressing towards the achievement of the Millennium Development Goals. 

According to the UN e-Government Survey 2012, progress in online service delivery continues in most countries around the world. The United Nations E-Government Survey 2012 finds that many have put in place e-government initiatives and information and communication technologies applications for the people to further enhance public sector efficiencies and streamline governance systems to support sustainable development. Among the e-government leaders, innovative technology solutions have gained special recognition as the means to revitalize lagging economic and social sectors.

The overall conclusion that emerges from the 2012 Survey in today’s recessionary world climate is that while it is important to continue with service delivery, governments must increasingly begin to rethink in terms of e-government – and e-governance – placing greater emphasis on institutional linkages between and among the tiered government structures in a bid to create synergy for inclusive sustainable development. An important aspect of this approach is to widen the scope of e-government for a transformative role of the government towards cohesive, coordinated, and integrated processes and institutions through which such sustainable development takes place.

For more information:

Expert Group Meeting on “2014 UN E-Government Survey: E-Government as an Enabler of Collaborative Governance”
UN E-Government Surveys

Large turnout for Internet Governance Forum

More than 1,630 onsite participants from over 128 countries convened at the 7th Internet Governance Forum (IGF) in Baku, Azerbaijan on 6-9 November, while more than 3800 unique visitors connected remotely

There were 429 government representatives, 161 representatives from the technical and academia community, 268 representatives from the private sector, 541 from the civil society, 96 representatives from international organisations, and 123 accredited journalists. 

Remote participation has become a major strength of the IGF process as this feature enables unprecedented access to and interaction with experts for any individual with an Internet connection. It also significantly increases knowledge sharing, information dissemination, partnership building and capacity building in a way that makes the IGF meetings unique. Forty-nine remote experts and panelists participated via video and audio during the week. Fifty-two different remote ‘hubs’ allowed over 3,800 IGF enthusiasts to gather together to follow the proceedings in Baku. 

The event held a record number of workshops, best practice forums, dynamic coalition meetings and open forums. The theme for this year’s IGF was “Internet Governance for Sustainable Human, Economic and Social Development”. 

These sessions allowed participants to delve into both complicated and oftentimes controversial issues in an open and intimate manner. Topics at the workshops and other meetings ranged from issues related to cyber-security and child protection online, the rise of social networks, the use of “big data”, and various aspects of human rights as they relate to the Internet, among many others. 

DPI has so far gathered over 1,000 articles published in 30 countries in English, German, Azerbaijani, Turkish and Russian. The bulk of the coverage has been in the United States, Germany, India and in the host country,Azerbaijan. 

DESA’s Under-Secretary-General Wu Hongbo took part in the opening of the Internet Governance Forum (IGF).

For more information:
7th Internet Governance Forum (IGF)

Practical Transfer Pricing Manual approved

The 8th session of the Committee of Experts on International Cooperation in Tax Matters (the Committee) was held on 15-19 October in Geneva

This was the last meeting of the current Membership of the Committee, expiring in June 2013. A new Membership will be selected by the Secretary-General, following nominations by Member States next year and will take up their 4-year term on 1 July 2013. While nominated by countries, Members of the Committee act in their personal capacities.

United Nations Model Tax Convention update
The Committee took note of the publication by the Secretariat of the updated English version of the UN Model Double Taxation Convention between Developed and Developing Countries (the UN Model). It also reiterated the importance of the update for developing countries as the UN Model forms the basis of the double tax treaty practice of many of them and its revised and expanded version will better fulfill that purpose. The Committee also reaffirmed the importance of translation of the UN Model into all the official UN languages. It also expressed support for more frequent updates of the Model. 

Transfer Pricing: Practical Manual for Developing Countries and related issues
In a major development, the Committee adopted its Practical Transfer Pricing Manual for Developing Countries subject to editing and formatting by the Secretariat working with the Coordinator of the Transfer Pricing Subcommittee, Mr. Stig Sollund of Norway. The assistance of the European Commission and Norway in completing the project was acknowledged. 

Transfer pricing addresses the pricing of transactions within multinational enterprises (MNEs), which must set prices for such transactions for their own purposes. This also creates opportunities for profits to be booked in low or no tax jurisdictions and losses to be booked in higher tax countries, including developing countries. Payments for the use of MNE “brands” or intra-group services often require special scrutiny to see if they have these sorts of tax avoidance consequences. 

The standard under the UN Model Double Taxation Convention, and its OECD counterpart, is that such pricing can be adjusted by countries where it is not at an “arm’s length” rate – in other words if it is not at market rates. Establishing “arm’s length prices” for complex MNE transactions is notoriously difficult because of the lack of direct market comparables for intellectual property and other MNE transactions, which often comprise unique assets, complex set-offs and linked arrangements.

The Manual seeks to assist developing countries in addressing these issues, including in developing and retaining the skills needed, establishing a suitable legislative framework, and identifying and accessing relevant information. It is the first UN “product” to address this important aspect of taxation of MNEs and it was recognized by the Committee that to fully achieve its goals it will need to be regularly updated.

Now that the Manual has been approved, the way has been opened for a thorough discussion of the approach taken to transfer pricing in the UN Model, and its relationship to the OECD work in that area. This is likely to be a key and contentious issue for the first meeting of the new Membership of the Committee in October 2013. 

Tax treatment of services
As services become an increasingly important and valuable component of global trade, the issue of how profits on services transactions should be taxed is an increasingly urgent one. While there is agreement that it would dampen such trade if both the country of the provider of the services and the country where the services are provided doubly-taxed the profits on the services, there is disagreement on which of those countries should be allowed to exercise the taxing jurisdiction for services transactions under tax treaties, and whether such a taxing right should be limited. 

Work on seeking a coherent framework for distributing taxing rights over services between countries will no doubt continue as a high priority for the Committee. The key outcome of the 8th session was an agreement that there should be a special provision in the next version of the UN Model for countries wishing to include in their treaties a right of countries wherein advisory services are provided to tax such payments.

Inclusion of the “fees for technical services” provision will be a very useful practical addition for developing countries, offering stronger guidance and support for such proposals in treaty negotiations and in implementing such treaties. It will also sharply differentiate the UN Model from the counterpart OECD Model Tax Convention. 

UN Model Convention and climate change mechanisms
A detailed paper on the taxation of profits from emissions trading under the UN Model was discussed and suggestions were made for finalizing the paper. This will help clarify the issues in terms of avoiding double taxation of profits that could dampen such trading, but also ensuring that developing countries receive their appropriate taxing rights over such profits. While profits in this area are not immediately likely, it was considered important to consider the issues at an early stage and to show leadership on the issue. This is also an important landmark for the UN Tax Committee as it represents the first sustained consideration of taxation issues related to the environment. 

Building capacities
The need for greater UN capacity building on tax cooperation issues was noted, as was the need to, as far as possible, work cooperatively with others active in the area. The Secretariat provided an update on relevant developments within its new Capacity Development Programme in International Tax Cooperation, aimed at strengthening the capacity of the ministries of finance and national tax authorities in developing countries to develop more effective and efficient tax systems, which support the desired levels of investment, and to combat tax evasion. These included: the new mandate contained in ECOSOC resolution 2012/33, progress of work on developing the “UN Course on Double Tax Treaties” based on the 2011 Update of the UN Model Double Taxation Convention and other capacity development initiatives. 

Value added tax issues
The Committee heard a presentation on some international tax issues relevant to value added taxes, especially as they relate to the interaction of value added taxes and income taxes addressed by the UN Model This was the first Committee consideration of VAT issues, as it has previously focused on direct taxes, and therefore an important landmark in light of the importance of VATs to most developing countries and some of the abuses that occur in that field. The Committee responded positively to the proposal that it consider international tax issues in that area and the relevant work will continue over the coming year. 

Foreign direct investment
Some of the policy issues driving country approaches to taxation of economic rents were explored in a presentation by one of the Committee Members, and the Committee agreed to examine the issues further and to create a Working Group to consider extractive industries taxation issues for developing countries and some possible approaches. 

The next meeting of the Committee, with its new Membership, will be held on 21-25 October 2013. The provisional agenda was set for approval by ECOSOC. Key issues will include transfer pricing policy and practice, discussion of a proposed provision on fees for technical services, taxation and climate change issues, capacity building, international VAT issues, and taxation of extractive industries.

For more information:
Eighth Session of the Committee of Experts on International Cooperation in Tax Matters