ICC reacts to OECD Action Plan on international taxation issues
The International Chamber of Commerce (ICC) has welcomed today’s publication of an Organisation for Economic Co-operation and Development (OECD) action plan, created in response to a request by the G20, which identifies a set of domestic and international actions to address the problems of base erosion and profit sharing.
“Tax rules are essential for cross-border
trade, business investment, jobs and growth and it is essential that tax rules
are predictable and preferably do not distort economic decisions,” said ICC
Secretary General Jean-Guy Carrier. “Today’s tax rules applying to cross-border
trade are based on the non-aligned domestic tax rules of more than 200
countries. This creates barriers to trade and has a negative effect on global
trade, economic growth and job creation.”
Lacking coordination between countries on
tax rules – including differences between OECD countries and emerging markets
on source and residence based taxation – differing definitions of economic
instruments and legal entities as well as administrative procedures can lead to
double taxation or unintended so called double non-taxation. Responding to the
OECD report the ICC Commission on Taxation said that it is essential to address
these issues in the BEPS project.
“Governments must agree on acceptable
forms of tax competition and avoid labelling businesses as aggressive tax planners or tax avoiders
when using legislated tax incentives such as accelerated depreciation or patent
box regimes,” said Taxation Commission Chair Theo Keijzer, “In return businesses must adhere to rules and
principles agreed upon by and between countries.”
Speaking on behalf of world business, ICC
has stressed the need for universal rather than sector specific changes of
international tax rules stating that corporate income tax should continue to be
levied according to where economic activity takes place and profits are
rendered. Prices of goods or services must reflect economic activity and ICC
agrees with the OECD report that unintended double non-taxation, in a situation
with so-called hybrid instruments, should be addressed by governments.
ICC is pleased to note that its project
for International Tax Reform, announced at the United Nations Tax Expert
Meeting in October 2012, will be launched shortly. The project is aligned to
the OECD and G20 proposal to develop new global tax standards and ICC looks
forward to working together with the OECD and G20 to help define the contours
of a suitable global tax framework that encourages business activities, job
creation and economic growth.
With business members in all G20
countries, ICC is uniquely placed to provide business comment on the OECD
proposals and the current overhaul of international taxation rules which calls
for an inclusive and transparent process.
For more information visit the ICC Commission on Taxation