HEADS OF THE REVENUE OF BRICS COUNTRIES
IDENTIFIES SEVEN AREAS OF TAX POLICY AND TAX ADMINISTRATION FOR EXTENDING THEIR
MUTUAL COOPERATION:-
JOINT COMMUNIQUE ISSUED AFTER TWO DAY MEETING OF THE HEADS
OF REVENUE OF BRICS COUNTRIES
Affirming
their continued commitment to promote closer coordination and cooperation in
the area of tax administration, the Heads of the Revenue of the BRICS Countries
i.e. Brazil, Russia, India, China and South Africa, identified seven areas of
tax policy and tax administration, for extending their mutual cooperation. This
was contained in the Joint Communique issued here today at the end of two day
meeting of the Heads of Revenue of BRICS Countries. This mutual cooperation
includes contribution to development of international standards on
International Taxation and Transfer Pricing taking into account the aspirations
of developing countries in general and BRICS Countries in particular. The other
areas of cooperation are strengthening the enforcement processes, sharing of
best practices and capacity building, sharing of anti-avoidance and
non-compliance practices and promotion of effective exchange of
information.
The
communiqué expresses the concerns of BRICS Countries at the erosion of the tax
base by practices that involve abuse of tax treaty benefits, incomplete
disclosure of information and fraudulent claims and makes a commitment to
address these concerns by preventing the base erosion and profit shifting
through mutual cooperation.
The
communiqué also expresses an agreement amongst BRICS Countries for working
together towards capacity building, improvement of systems and sharing of
resources, knowledge and best practices and emphasizes the spirit of
cooperation and solidarity that underlies the BRICS partnership and aims at
extending it to the area of tax administration in a way that will benefit the
people of BRICS Countries.
The Heads
of Revenue of BRICS Countries earlier met in New Delhi on 17th and
18th January, 2013 and held discussions on issues relating to
International Taxation, Transfer Pricing, Prevention of Cross-border tax evasion
and avoidance, exchange of information, sharing of best practices in tax system
administration and resolution of disputes. The meeting was inaugurated by
Finance Minister of India on 17th January and was concluded on
18th January, 2013 by the Revenue Secretary Shri Sumit
Bose.
This was
the first meeting of the Heads of Revenue and on conclusion of the meeting, a
joint communiqué was issued in which the Revenue Heads of BRICS Countries
agreed to develop greater cooperation among their tax administrations on
various issues of mutual interest and concerns. The communiqué recognizes the
importance of the economic and commercial links amongst BRICS Countries and the
need to contribute to the strengthening of these links.
Following is the Joint Communique issued after the meeting of the
Heads of the Revenue of BRICS Countries:
Communiqué of BRICS
Heads of Revenue Meeting Issued in New Delhi on 18th January,
2013
We, the
Heads of Revenue of the Federal Republic of Brazil, the Russian Federation, the
Republic of India, the People's Republic of China and the Republic of South
Africa held a meeting on 17th and 18th January,
2013 at New Delhi to discuss the potential areas of cooperation based on our
existing commitment to openness, solidarity, mutual understanding and trust, as
stated in the Delhi Declaration issued on March 29, 2012. In this context, we
would like to refer to the decision taken during the BRICS Finance Ministers
and Central Bank Governors meeting held in Washington DC on 19th April,
2012, wherein it was agreed by all countries to develop a cooperative approach
on issues relating to international taxation, transfer pricing, exchange of
information and tax evasion and avoidance.
Tax
Administration Cooperation
In
accordance with the above, we conducted the meeting with the primary objective
of identifying specific areas of common interest and concern and finding ways
and means for improving cooperation in these areas related to international
taxation, transfer pricing, exchange of information, prevention of tax evasion
and avoidance, and tax legislation and administration. We
· affirm our continued
commitment to the objectives of the BRICS Heads of Revenue of promoting closer
coordination and cooperation on issues of mutual concern;
· recognise the
importance of the economic and commercial links between Brazil, Russia, India,
China and South Africa and the need for us to contribute to the strengthening
of these links.
We agree
to extend the cooperation on the following issues of tax policy and tax
administration:
(i) Contribute
to development of International Standards on International Taxation and
Transfer Pricing taking into account the aspirations of developing countries in
general and BRICS Countries in particular
(ii) Strengthening
the enforcement processes by taking appropriate actions for non-compliance and
putting more resources on international cooperation
(iii) Sharing of
best practices and capacity building
(iv) Sharing of
anti-tax evasion and non-compliance practices, including abuse of treaty
benefits and shifting of profits by way of complex multi-layered structures
(v) Development
of a BRICS mechanism to facilitate countering abusive tax
avoidance transactions, arrangements, shelters and schemes
(vi) Promotion
of effective exchange of information
(vii) Any other
issues of common interests and concerns related to taxation.
Confronting
Non-Compliance with the Tax Laws in an International Context
We express
our concern at the erosion of the tax base by practices that involve abuse of
tax treaty benefits, incomplete disclosure of information and fraudulent
claims, and jointly agree to work together to address these
concerns. We commit to prevent the base erosion and profit shifting through
cooperation amongst ourselves and with other countries. We also
agree to produce a paper on these subjects for mutual benefit of BRICS
countries.
Capacity
Building
We agree
to work together towards capacity building of personnel and improvement of our
systems and express our commitment to share resources, knowledge and best
practices to achieve this end.
Multilateral
Cooperation
We also
agree to establish a central point of contact in each of the BRICS Countries
for coordination of issues relating to taxation. The central points of contacts
will identify issues of common interest in areas of International Taxation and
Transfer Pricing and will develop a common response, interact and meet
regularly, including pre-meeting before important multilateral meetings. The
agreed common response of the BRICS countries would be communicated to
international organisations engaged in development of standards on
International Taxation and Transfer Pricing.
Governance
Issues
We agree
to make a commitment to continue the process of cooperation in tax
administration. We agree to establish a Governance Framework in accordance with
the overall BRICS commitment by May, 2013.
We
reiterate the spirit of cooperation and solidarity that underlies the BRICS
partnership, and look forward to extend it to the area of tax administration in
a way that will benefit the people and our countries and contribute to their
overall wellbeing.
We also
agree:
(i) to inform the BRICS
Summit of the outcomes of our deliberations; and
(ii) to decide the date and place of
next meeting BRICS Heads of Revenue after mutual consultation.
Source:- Press Info, GOI, Ministry of Finance
With Regards
Prakash Verma
Email: Prkverma@gmail.com
