TRADE & FINANCE
G20:
ASPIRING TO A
COMMON TAX
LANGUAGE
CHRIS SANGER
EY Global Tax Policy
Leader
The G20/OECD Base Erosion and
Profi t Shifting (BEPS) project has
been yet another indication that tax
operates in an ever more connected
world. Bringing together the diff ering
perspectives on taxation, and
coalescing them around 15 Actions,
was an achievement that would have
been unthinkable even a decade ago.
Yet it, and many other initiatives, now
exist above the remit of the individual
governments, striving to bring greater
alignment and coherence to the world’s
varied tax systems.
Such alignment brings real benefi ts
for governments, but also off ers the
appetizing prospect for businesses of
tax systems that are more coherent.
Reducing disparities should reduce
situations in which tax has the potential
to complicate commercial decision-
making, something most business
leaders would welcome.
Transparency demands communication
The benefi t of alignment has made the
role of the G20 and the international
organizations even more important, as
they help to bring together the various
parties. However, it also has changed
the role of the tax director. While they
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have always needed to be good at
understanding the many and varied tax
provisions, the discussion of BEPS and
other topics has required them to become
good communicators and diplomats, able
to explain the approaches undertaken by
their businesses but also to understand
the perspective of governments.
Today we have a much greater focus
on transparency, not only as a result of
the BEPS country-by-country reporting
requirements, but also the wider
provisions on exchange of information.
We now have over a hundred
jurisdictions committed to operate
Automatic Exchange of Information
(AEOI). In this new landscape, those
communication skills are going to be
in ever greater demand.
Such transparency is set to increase,
as seen at the G20’s recent meeting
in Chengdu which focused on tax
transparency objectives and reform
progress generally. Here representatives
restated the call for automatic exchange
of information by 2018. China’s Finance
Minister, Lou Jiwei, also supported the
development of a new international
tax environment and China’s release of
new guidance on 29 June 2016 formally
introduced country-by-country reporting.