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International Initiatives In Focus

Kitty Miv, Editor
30 July, 2021

Last week we looked at tax measures being put in place by governments in response to the ongoing COVID-19 pandemic, and this week we will be broadening our focus from the national to the international, starting with moves by the European Union to advance its green agenda.

Speaking recently, EU Commissioner for the Economy, Paolo Gentiloni, explained that the Union intends to introduce a new Carbon Border Adjustment Mechanism on a phased basis, with a transitional period between 2023 and 2025.

The proposals for the CBAM involve putting a carbon price on imports of a targeted selection of products to ensure that ambitious climate action in Europe does not lead to 'carbon leakage'. Imported goods would be exempt from taxation only if importers can prove that an equivalent carbon price has already been paid during the production of the imported goods.

On the international tax reform front, meanwhile, the Irish authorities are seeking taxpayer opinions on the corporate tax reform program being proposed for worldwide introduction, which would likely have a significant impact on their tax positions.

When the OECD released its proposals for international tax reform on July 1, initially 130 countries put their name to a statement supporting the adoption of the plans. This roster later grew to 132. Ireland is among seven members of the BEPS Inclusive Framework to omit its support.

The Irish Government is now seeking input on how the country should respond, and to this end, has launched a consultation on the issue, set to run until September 10, 2021.

Last but not least for this week, as part of the ongoing BEPS project, the OECD released new BEPS Action 14 peer review reports on eight territories' efforts to improve tax dispute resolution, for Argentina, Chile, Colombia, Croatia, India, Latvia, Lithuania and South Africa.

Under BEPS Action 14, jurisdictions have committed to implement a minimum standard to improve the resolution of tax-related disputes between jurisdictions. The OECD has released new Stage 2 reports for the territories. These evaluate the progress made by these eight jurisdictions in implementing any recommendations resulting from their Stage 1 peer review.

The BEPS Action 14 minimum standard covers a number of areas: dispute prevention, access to Mutual Agreement Procedure dispute resolution, how effectively MAP cases are resolved, implementation of MAP agreements, MAP guidance, and MAP data reporting.

According to the OECD, there has been positive change in all eight jurisdictions. Not all territories are making the same level of progress though, it observed.

With the publication of the latest BEPS Action 14 reports, in total, 82 Stage 1 peer review reports and 61 Stage 1 and Stage 2 peer monitoring reports have now been finalized and published. The OECD said the seventh batch of Stage 2 reports will be released in a few months.

Until next week!


About the Author

Kitty Miv, Editor

Kitty was born in Argentina in 1960 to a Scottish cattle rancher and his Argentine wife. Educated in Edinburgh and at Princeton, Kitty worked for the World Bank as an economist, where she met and married an emigre Iranian banker. During her time with the Bank, Kitty worked in a number of emerging markets, including a spell in the ex-USSR as a Transition Economies Team Leader. Kitty is now a consultant in Brussels and has free-lance writing relationships with a number of prominent economic publications. kitty@lowtax.net


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