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Tax Policy

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27.02.2018 - Article

Tax Policy

Responsable Delegate: Karin Hochhaus, Tel. +33 (0)1 55 74 57 17, Contact Form

The field of tax policy is coordinated in the OECD by the Centre for Tax Policy and Administration (CTPA). The aim of the OECD’s work in the field of international tax law is to lay down internationally recognised standards and codes of conduct.

Germany expressly welcomes and supports the OECD’s work on tax matters.

An outstanding example is the initiative on Base Erosion and Profit Shifting (BEPS), which plays an important role in combating international tax evasion and tax avoidance. The G20 agreed on the 15 BEPS actions at its summit on 15 and 16 November 2015.

The aim is to prevent “double non-taxation” arising from the use of (legal) tax optimisation methods in the future. In particular, multinational companies should not be able to secure non-justifiable competitive advantages over mainly small and medium-sized enterprises. In addition, such tax practices raise the question of tax fairness.
Companies must report to the fiscal authorities if their turnover exceeds €750 million euros.

On 27 January 2016, an agreement was signed by 31 countries on the further implementation of the BEPS actions. G20 countries, OECD Members and other countries are signatories to this Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports. The number of signatory States is constantly increasing. The exchange of data will commence in 2017.

The 15 BEPS actions are also being implemented via explanatory regulations that are currently being drawn up in the OECD.

In addition, the Inclusive Framework will allow non-OECD Members to take part in the implementation of the BEPS actions.

The following two agreements are of particular importance:

The Multilateral Competent Authority Agreement on the Exchange of Country-by-Country Reports of 27 January 2016. The exchange of data will commence in 2017;
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting of 24 November 2016.

The OECD sets international standards in the following three areas in particular:

1  OECD Model Tax Convention on Income and on Capital

The OECD Model Tax Convention on Income and on Capital of 1992 forms the basis for the double taxation agreements negotiated by Germany with other countries.

2 Transfer prices

The principles of the OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations of 1995 are enshrined in German law and form the basis for delineating taxation rights between Germany and its economic partners. The aim is to ensure that the revenues of multinational enterprises are assigned correctly to the jurisdictions in question and to prevent revenues from being shifted abroad.

3 Combating tax avoidance and tax evasion

All important financial centres have now accepted the OECD standard on transparency and exchange of information for tax purposes and stated their willingness to implement this standard.

The Global Forum on Transparency and Exchange of Information for Tax Purposes, which reports to the OECD and has 137 members, monitors compliance with the standard via a two-phase inspection process. The OECD and Council of Europe’s Convention on Mutual Administrative Assistance in Tax Matters is another important instrument for combating tax avoidance and tax Evasion.

More Information:

Federal Ministry of Finance

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