New international context, new International Tax Planning Manual

Fifteen years have passed since CIAT published its Manual on the Control of International Tax Planning; a pioneering document at the time, prepared within the framework of a working group composed of tax administrations from America and Europe, led by the AFIP of Argentina. This Manual presents theoretical content on the pillars of international taxation and a catalogue of schemes, maneuvers and instruments used to design harmful tax planning based on the experience of the countries that made up this working group. Much of the subject matter covered in this Handbook, published in 2007, is still relevant which is why we have decided to keep it available in our library.

Since 2007, much water has flowed under the bridge, including the global financial crisis, the digitalisation of the economy, globalisation and the COVID-19 pandemic crisis. During these years, the international community has put on the table initiatives aimed at creating new developments to contain harmful international tax planning and generated commitments that allowed improving the levels of transparency and international tax cooperation. As a result, a significant group of countries have implemented adjustments in the rules, procedures and structures of their tax administrations, to address these challenges and meet international commitments. However, there is still a long way to go (especially for smaller or less developed countries) given the complexity of the issue, the speed with which businesses evolve and transform, and the developments that are consequently made to meet the new challenges (Ex.: Pillars I and II of BEPS Action 1).

The CIAT Executive Secretariat developed two initiatives to complement the efforts of the Working Group that prepared the Manual, drawing on the expertise of its International Taxation Network. One of them was launched in 2019 and is called “Database of Transnational Cases Involving the Erosion of the Taxable Base”. This database contains general information on the tax system applicable to international operations in 24 countries and has 35 cases based on the experience of 19 tax administrations, which disclose the main risks of non-compliance identified and the mechanism used to identify it. These cases are classified by country, by economic sector and by type of tax planning scheme, becoming an important source of knowledge that motivates interaction and exchange between tax administrations. This initiative expands the part of the catalogue of schemes, manoeuvres and instruments for aggressive tax planning in the 2007 Manual and is currently available only to officials appointed by tax administrations.

The second initiative consists in the preparation of an updated theoretical and practical Manual, which serves to provide tax administrations officials from member countries as well as those interested in the matter, a robust knowledge of the main elements that currently shape the control of international tax planning. For this we have provided an index composed of 42 sections prepared by 48 experienced authors from various countries and fields of action. These sections are divided into 6 main chapters dealing with introductory aspects, an analysis of the concept of “international tax planning”, measures and tools to contain international tax planning and other relevant administrative issues related to this topic.

To materialize this initiative, we have received the support of two historical partners of CIAT; the German Cooperation (GIZ) and the EUROsociAL+ Program, who have sponsored together with CIAT the update of the Manual and the meetings of the International Tax Network.

In order to update the content of the Manual in a timely and practical manner and thus meet the speed with which changes in the context are brought about, a format of working papers was adopted, where each section of the Manual can be downloaded as a separate document.

Today we are proud to launch this work by publishing Chapter No. 2, called “International Tax Planning”, where Dr. Heleno Taveira Torres shares his vast experience and makes known in a clear, academic and very technical way those elements that allow us to assess a tax plan; illustrating us with examples of dilemmas that are generated from the thin line that exists between avoidance, evasion and tax fraud. This Chapter is available in English and Spanish.

In the coming months, new sections will be published, until completing the index of the Manual, which can be consulted, together with the introductory chapter and the aforementioned Chapter No. 2, at the following link.

 

 

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Disclaimer. Readers are informed that the views, thoughts, and opinions expressed in the text belong solely to the author, and not necessarily to the author's employer, organization, committee or other group the author might be associated with, nor to the Executive Secretariat of CIAT. The author is also responsible for the precision and accuracy of data and sources.

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