UN Handbook on Selected Issues in Protecting the Tax Base of Developing Countries
| Type | Voluntary commitment by other stakeholders |
|---|---|
| Organisation | Financing for Development Office of the UN Department of Economic and Social Affairs |
| Scope | Global |
| Themes | Domestic public resources |
Description
This Handbook is a tangible deliverable towards the objectives of the Addis Conference and seeks to serve as a practical tool in the daily work of tax professionals in developing countries, towards protecting their tax base, which is crucial for the success of national efforts to foster sustainable development.
The Handbook provides a study of the OECD work on BEPS, along with an analysis of the strategies proposed so far to address BEPS issues. It aims to define the most suitable modalities to protect the tax base of developing countries, taking into account their needs and levels of development. It also outlines several approaches that might be relatively easy to implement, in light of the resource and capacity constraints of these countries. For example, consideration is given to the role of withholding taxes in preventing tax base erosion through the payment of cross-border interest.
The Handbook identifies some shortcomings of existing international tax norms, which make the taxation of cross-border business activities conditional upon a continuous or substantial physical presence in a country, while nowadays, significant economic activities can be performed without such presence, resulting in forgone tax revenue. In addition to dealing with matters that are considered in the context of the OECD work, such as the tax challenges of the digital economy and new business models, the Handbook addresses other topics of particular importance to developing countries, such as the taxation of services, taxation of capital gains and tax incentives.
This Handbook aims to assist developing countries in:
(a) engagement and effective participation in international norm-setting and decision-making processes;
(b) assessment of relevance and viability of potential options to protect and broaden their tax base, including those proposed by the OECD; and
(c) effective and sustained implementation of the most suitable options from which they would benefit.
Partners
A distinct feature of this Handbook is that it has been developed as a result of a unique collaborative engagement between government representatives from developing countries, members of the UN Committee of Experts on International Cooperation in Tax Matters, a group of world-renowned tax scholars and practitioners and relevant international and regional organizations (OECD, CIAT and ATAF).
Targets
Increase in public revenue in developing countries available for funding of sustainable development
Indicators
(a) Increase in tax to GNI ratios
(b) Reduction in tax collection costs
Resources
n/a
Timeframe
Continous