The Platform for Collaboration on Tax Invites Final Comments on a Revised Version of its Report on the “Taxation of Offshore Indirect Transfers of Assets”
IMF News, July 16, 2018
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- The Platform for Collaboration on Tax Invites Final Comments on a Revised Version of its Report on the “Taxation of Offshore Indirect Transfers of Assets”
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- Published: July 16, 2018
Background and purpose
- The Platform for Collaboration on Tax is a joint initiative of the IMF, OECD, UN and World Bank Group.
- At the request of the G20, the Platform is developing a series of “toolkit” reports to help guide developing countries in implementing policy options on international taxation issues identified by those countries.
- One issue identified is the taxation of offshore indirect transfers of assets, which:
- Is addressed in both main double taxation model treaties of the OECD and the UN.
- Has no unifying principle adopted by individual countries; countries follow very different approaches in domestic law.
- Faces the complication that many treaties now in effect do not include the relevant model treaty provisions.
Consultation process and timeline
- A previous draft was posted for comment from late summer through October of 2017 and generated substantial interest.
- The first draft received 19 sets of detailed comments from various groups (country authorities, civil society organizations, private sector), representing a much larger number of individual entities.
- Given the volume and nature of comments, the Platform partners produced a new draft, posted with new questions for consideration.
- Reactions are sought by September 24, 2018.
Companion document and responses to comments
- A new ten-page document is posted that:
- Systematically details the comments received.
- Identifies the parties who made them.
- Describes how the new draft responds to those comments.
- The authors did not agree with or adjust the text for every comment, notably where commenters took diametrically opposing views on fundamental issues.
- Most comments have been addressed and the new version attempts to clarify issues that caused confusion.
- Readers are encouraged to review the companion document before reading the new version of the report.
Questions to consider when reviewing the new version
- Has the draft better clarified the economic rationale for taxing such transfers by offshore indirect owners?
- The new draft does not express a preference for either of the described legislative approaches to taxing these transfers — is this made clear?
- Does the draft adequately reduce any perceived emphasis on such offshore transfers as constituting tax avoidance, and make clear that the economic rationale for so taxing them is not as an anti-avoidance device?
Original posted questions from the first draft
- 1. Does this report effectively address the rationale(s) for taxing offshore indirect transfers of assets?
- 2. Does it lay out a clear principle for taxing offshore indirect transfers of assets?
- 3. Is the definition of an offshore indirect transfer of assets clear?
- 4. Is the discussion regarding source and residence taxation in this context balanced and robustly argued?
- 5. Is the suggested possible expansion of the definition of immovable property for the purposes of the taxation of offshore indirect transfers reasonable?
- 6. Is the concept of location-specific rents helpful in addressing these issues? If so, how is it best formulated in practical terms?
- 7. Are there other implementation approaches that should be considered?
- 8. Is the report’s preference for the ‘deemed disposal’ method appropriate?
- 9. Are the complexities in the taxation of these international transactions adequately represented?
- Reviewers were invited not to restrict themselves to these questions; any other views on addressing the taxation of offshore indirect transfers of assets were welcome.
Submission instructions and transparency
- Comments should be sent by e-mail no later than September 24, 2018 to GlobalTaxPlatform@worldbank.org (a common comment box for all the Platform organizations).
- All comments received will be made publicly available.
- Comments submitted in the name of a collective “grouping” or “coalition”, or by any person submitting comments on behalf of another person or group of persons, should identify all enterprises or individuals who are members of that collective group, or the person(s) on whose behalf the commentator(s) are acting.
IMF Communications Department, Press Release No. 18/297, July 16, 2018
Content in this bundle
- Platform Responses to First Set of Public Comments
- Réponses de la plateforme à la première série de commentaires publics
- Respuestas de la plataforma para el primer conjunto de comentarios del público
- pr18297offshoreindirecttransferstoolkitver2-071618
- pr18297ver2-071618f
- pr18297ver2-071618s