Remarks by Angel Gurría
Malta, 8 April 2017
(As prepared for delivery)
It is a pleasure to be here, and I would like to thank Minister Scicluna for the invitation to join you today. In leading global efforts to reform the international tax system, the OECD has built a close relationship with the EU. Time and again, we have been able to count on you to be a “first mover” on implementing and promoting international tax standards.
While recent ECOFIN meetings have focused on tax evasion and avoidance, which remain important issues, I’m pleased that you have put tax certainty on the agenda. It reinforces our work on BEPS, links to your broader discussions on how to promote a stable and growth-friendly environment across the EU, and also ties in well with our work for the G20.
Amendments to tax systems and international tax rules are necessary to adapt to economic changes driven by globalisation and digitalisation, but this creates uncertainty for business that can limit trade and investment. Given the rapid changes that have occurred in recent years, identifying the sources of uncertainty in tax matters was a key aim of a survey we undertook at the end of 2016. That survey covered firms with headquarters in 62 countries including almost all EU member states, and whose total turnover was close to 17 trillion US dollars. The results, set out in a joint OECD-IMF report published in March, show that inefficiencies in the mechanisms for resolving cross-border tax disputes are among the top sources of uncertainty. As recognised in both the BEPS Project and the Commission’s 2015 Action Plan for fair and efficient corporate taxation, dispute prevention and resolution must be a priority if we are to establish a better business environment.
I am therefore pleased to see the progress you have made towards a draft Directive on Double Taxation Dispute Resolution Mechanisms. This initiative is a welcome step, in particular to ensure the availability of mandatory binding arbitration, which experience has shown to be a catalyst for the efficient resolution of tax disputes.
We will continue working with the Presidency and Commission to ensure that the directive’s provisions are well-integrated with existing tax rules and agreements, and I urge you to conclude negotiations quickly. The directive will also help EU members to meet their commitments under the minimum standard in BEPS Action 14, which are subject to a peer review process already underway.
I also encourage you to join the signing of the multilateral convention to implement tax treaty-related measures to prevent BEPS on 7 June in Paris. This would help show the EU's leadership in this area and encourage the adoption of the opt-in provisions on arbitration. The convention is complementary with the directive. We expect over 50 countries to participate in the signing ceremony, which will include a discussion of ongoing international tax cooperation and the importance of rapid implementation of the BEPS measures. The event will take place right after our Ministerial meeting, which will discuss how to make globalisation more inclusive.
When we met in September, I also mentioned BEPS Action 12, concerning mandatory disclosure rules, which aims to tackle the lack of timely and comprehensive information on aggressive tax-planning strategies and to target the professional enablers who promote these schemes. While not a BEPS minimum standard, the outcry over the Panama Papers and other scandals has raised the profile of this topic. We believe that targeting the promoters of schemes which, for example, seek to circumvent tax-reporting obligations on financial accounts or to hide the true beneficial owners of assets can be effective. Commissioner Moscovici has led the way in considering how such rules could be applied in the European context, and I encourage you to give your full consideration to such proposals.
The EU and the OECD have built a strong partnership on tax, and I thank the Commission and the Presidency and commend the commitment each of you to this agenda.