Plea to OECD: Make an Inclusive Process to Address Base Erosion and Profit Shifting for Tax Justice
Concerns and Demands by likeminded Asian Civil Society Organizations on OECD’s BEPS process, the Asia-Pacific Regional Network Meeting in Seoul February 13th 2015
We, thirty-two civil society organizations (CSOs) across Asia, welcome the G20 OECD initiative to address the problems of Base Erosion and Profit Shifting (BEPS). Moreover, we appreciate the invitation for stakeholders’ perspective at theAsia-Pacific Regional Network Meeting in Seoul. Receiving this invitation with a very short notice we are nevertheless concerned that civil society interests (especially from developing countries) might not be adequately represented. We recommend OECD to considerthis prior to the evaluation of Seoul meeting.
We see the BEPS process as the first step towards creating a fairer and more effective international tax system and we like to point to the G20 countries’ promise from St. Petersburg 2013 that “developing countries should be able to reap the benefits of a more transparent international tax system”. Developing countries, however, are currently systematically deprived of tax revenue by corporate tax dodging, and subsequently lacking revenue to finance the schools, hospitals and roads they need. In light of this, as our major demands we ask G20 and OECD governments to:
- Recognize the role of other bodies with wider international reach – such as the UN Committee Experts on International Co-operation in Tax Matters – where important discussions on the future of International tax rules are taking place and consider actively boosting the UN Tax Committee’s mandate and status.
- Acknowledge BEPS process is unlikely to produce results to ensure developing countries can adequately protect their tax bases. G20 and OECD should articulate a timeline for further reforms that will be needed after BEPS process is concluded and when negotiating such reforms developing countries (and importantly Least Developed Countries - LDCs) should be included as equal partners.
- Carry out thorough and well-resourced ‘spillover’ analyses, looking at the negative impacts of their own tax rules on other countries, especially developing countries (as already carried out by the Netherlands and Ireland).
- Issue a High Level Declaration committing to end beggar-thy-neighbor tax practices that allow low tax rates for multinationals and promote a race to the bottom in corporate taxation, and invite all states to adhere to this commitment.
- Establish a mechanism to ensure that all tax authorities have direct access to the Master File of transfer pricing documentation along with the Country-by-County Reports. Ideally, the latter should be published, as it should not contain commercially confidential information. Country-by-Country reports should be submitted directly by the multinationalsto the tax authority of every country where they have economic activities. The existing procedure allowing the report to be filed to the tax authority only by the parent company will make it difficult or impossible for the tax authority of many developing countriesto has access, since they have few tax treaties and many are not parties to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters. Diffusion of these reports through tax treaty information exchange will be ineffective for most developing countries.
- Ensure that all countries especially the developing ones can fully participate in an equal basis in the negotiation and conclusion of the Multilateral Instrument to implement the results of the BEPS process. The arrangements for the ad hoc Negotiating Group should facilitate participation of developing countries in its Plenary, as well as adequate representation in the Bureau and Working Parties of the Group.
Last but not the least, in a broader perspective, reform of the current BEPS process is needed in order to answer fundamental questions about the current international tax system, for instance: How can tax treaties divide taxing rights fairly between rich and poor countries? How can alternatives to the arms-length principle be developed, endorsed and promoted?
We believe these and other issues to be solved in order to restore the developing country states’ fiscal power to impose taxes on multinational corporations effectively and to remove incentives to exploit international tax haven and offshore secrecy facilities.
Name of the organization and country
Solidarity other then Asia:
CEPO – South Sudan
Fiscal Justice Network of Latin America and Caribbean
Global Alliance for Tax Justice
South Asia Alliance for Poverty Eradication – SAAPE
South Asian Feminist Alliance for Economic, Social and Cultural Rights (SAFA)
Asia Pacific Research Network
Action Aid Bangladesh
Bangladesh Krishok Federation
Bangladesh Kishani Shova
Equity and Justice Working Group Bangladesh - EquityBD
Sushasoner Jonny Procharavizan – SUPRO
Peace Institute of Cambodia
Ponlok Khemer (PKH)
Youth For Peace (YFP)
Gramya Resource Centre for Women
Partners in Change
Praxis- Institute for Participatory Practices
Programme on Women’s Economic, Social and Cultural Rights (PWESCR)
Public Advocacy Initiatives for Rights and Values in India (PARIVI)
Center of Budget and Governance Analysis
Indian Social Action Forum
Indian National Defense Workers Federation
International NGO Forum on Indonesian Development – INFID
Trade Union Rights Center
Campaign for Climate Justice Nepal
Human Rights Alliance Nepal
NGO Federation of Nepal
Rural Reconstruction Nepal
Bhittai Social Watch and Advocacy (BSWA)
Manz Development Foundation
Institute for Social & Economic Justice (ISEJ)
Women In Struggle for Empowerment (WISE)
Peace & Human Development Foundation: (PHDF)
Pakistan Participatory Welfare Services (PWS)
Action Aid Pakistan
Pakistan Fisherfolk Forum
Sri Lanka :
Movement for Land and Agriculture Reform - MONLAR
National Fisheries Solidarity Movement
Action Aid Vietnam
The Centre for Sustainable Community Development (SCODE)
Teachers Organizations of the Philippines Public Sector (TOPPS)
Asia Pacific Research Network
Public Services Labor Independent Confederation
Basic Education Sector Teacher Federation