Advancing Open Standards in eGovernment -Tax

1. Advancing Open Standards in eGovernment -Tax Presentation to eGovWorkshop Brussels 19 February 2009 Brussels, Belgium By Reidar Nybø Centre for Tax Policy and Administration OECD www.oecd.org/ctp

2. The OECD

3. The OECD • Membership: 3 NAFTA, 4 Asian-Pacific countries and 23 European countries • Setter of “soft” and occasionally “hard” rules • A forum for discussing the economic and social challenges of interdependence and globalisation • A provider of comparative data, analysis and forecasts to underpin multilateral co-operation

4. OECD: How it Works Council Oversight and strategic direction Representatives of member countries; decisions taken by consensus Committees Secretariat Analysis and proposals Discussion and implementation Secretary-General Deputy Secretaries-General Directorates Representatives of member countries and countries with Observer status work with the OECD Secretariat on specific issues Annual budget: Funded by member countries + grants

5. The Committee on Fiscal Affairs What are we? A forum for senior policy makers and administrators What do we cover? All international and related domestic tax issues How are weorganised? • Biannual meeting • Eight subsidiary bodies • Centre for Tax Policy and Administration

6. The Centre for Tax Policy and Administration • Forty plus professionalsgroupedinto 5 divisions: • Treaties/Transfer Pricing; • International Co-operation; Tax Policy; • Tax Administration; Outreach What are we? • Draft reports for the CFA • Adviseother parts of OECD on taxrelated issues (e.g R & D) • Assistgovernments in theirtaxreforms • Compile comparative information • Co-ordinatewithother international • organisations What do we do?

7. Major Outputs of the CFA • Model Tax Convention • Transfer Pricing Guidelines • Standards on Exchange of Information • Best Practices Guidelines in Tax Administration • International VAT/GST Guidelines • Comparative Analysis and Statistics on Tax Levels and Structures • Anti-Bribery Convention

8. Politicians (Secretary-General meets Ministers, annual ministerial, sector ministerials) e.g. tax and growth CFA delegates e.g. attribution of income to permanent establishment, business restructuring Business (BIAC, associations, individual companies) e.g. arbitration, CIV/REITS Non-OECD countries How do Issues get onto the OECD’s Tax Agenda?

9. General Tax Reform Principles • A fairer tax system: • Similar treatment for similarly placed taxpayers (horizontal equity) • Achieve desired allocation of tax burden by income level (vertical equity) • Improved compliance • An efficient and competitive tax system: • Promoting a competitive and flexible fiscal environment • Making work, savings and investment pay • Reduce tax-induced distortions • A simpler tax system: • Reduce compliance costs for taxpayers, particularly SME’s • Reduce administrative costs for tax authorities

10. Successful Tax Reform Requires also Administration Reform • Tax administrations face challenges due to globalisation • Proliferation of tax shelters and abuse of tax havens • Changing attitudes towards compliance • The response of OECD tax administrations • Move to integrated tax administrations • Administration by segment/function rather than by type of tax • Move to cumulative withholding and information reporting • Improved risk management • Better access to information • Use of new technologies • Good compliance requires good taxpayer service and effective reinforcement • Putting tax compliance on the good corporate governance agenda

11. Outcome of the South Africa Meeting (2008): What is Needed? • Disclosure • Transparency • Co-operation • Trust

12. Pressures on Tax Administrations • Integration of direct and indirect administrations • Delivering social programmes • Using new technologies to improve tax payer service • Achieving better compliance – the role of risk management • Dealing with offshore non-compliance

13. Business participation in OECD’staxwork • Business and Industry Advisory Committee to the OECD (BIAC) • Technical Advisory Groups, Business Advisory Groups, etc. • Discussion drafts (www.oecd.org/ctp) • Public consultations

14. Enlarging the OECD • Current 30 Member countries account for • 60% plus of world’s GDP • 70% plus of inward and outwardinvestment

15. The Next Wave • The candidates: Estonia, Slovenia, Israel, Chile and Russia • A 2-5 year process • And at the same time enhancing our involvement with the BIICS (Brazil, India, Indonesia, China, South Africa) with a view to possible accession • Continued deepening of partnerships with many other NOEs and particularly ASEAN countries

16. The Next Wave • The candidates: Estonia, Slovenia, Israel, Chile and Russia • A 2-5 year process • And at the same time enhancing our involvement with the BIICS (Brazil, India, Indonesia, China, South Africa) with a view to possible accession • Continued deepening of partnerships with many other NOEs and particularly ASEAN countries

17. The OECD in 2020 • All major economies • Represented on all continents • Accounting for 80 % of world’s GDP/Foreign Direct Investment

18. Financial crisis – Issues • Tax deductibility of interest favours mortgages and corporate leverage • Tax heavens (trillions of $ - OECD is forcing transparency) • Ultra light regulation of investment banks • Excessive risk taking – advanced and extremely complex securities products (fruit-salads) • TCP/IP enabled one “borderless” financial world

19. Explore IT to improve compliance and taxpayer service • FTA Compliance Sub-group • FTA Taxpayer Services Sub-Group • FTA TEA Task Group • International Co-operation & Exchange of Information Unit

20. SOA and Web services - Tax • Underlying and enabling solutions based on service oriented architectures and web services require descriptions of the characteristics of these services and the data that drives them • Use of XML. (Remains open if it is the best)

21. Tax Metadata - a Necessity • Metadata describes characteristics of information bearing entities to aid the identification, assessment and management of the described entities • Bank account information: easy interpretation, could be difficult identification • Income/wealth information: complicated • Common challenge: legal framework needed

22. FTA TEA Task group (1999) • Representatives from tax adm and businesses (Chaired by F Wall, HMRC, UK and I Lejeune,PwC) • Development of international agreed guidelines and standards for tax accounting software (Standard Audit File – Tax) • Major software vendors and accounting bodies are encouraged to take these up

23. Taxpayer Services – Standard Business Reporting • Creating a financial taxonomy which can be used by businesses to report financial information to Government • Using the creation of that to drive out unnecessary or duplicated data descriptions • Enabling use of that taxonomy for financial reporting and facilitating straight-through reporting for many types of report direct from accounting and reporting software

24. Promotion of Open Standards and Net Neutrality • Standard-making processes should be open and should encourage competition. We support the procurement policies that promote open standards, open data formats, and free and open software. • The OECD Civil Society Seoul Declaration (2008)

25. OECD works with governments, and other international organisations • Tax administrations • Statistics Departments • Regulatory bodies • Standardisation organisations

26. The end • Thank you for your attention