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Burgers, I.J.J.; Mosquera, Valderrama I.J. (2017)
Types: Article
textabstractThe aim of this article is to examine the differences in perception of ‘fairness’ between developing and developed countries, which influence developing countries’ willingness to embrace the Base Erosion and Profit Shifting (BEPS) proposals and to recommend as to how to overcome these differences. The article provides an introduction to the background of the OECD’s BEPS initiatives (Action Plan, Low Income Countries Report, Multilateral Framework, Inclusive Framework) and the concerns of developing countries about their ability to implement BEPS (Section 1); a non-exhaustive overview of the shortcomings of the BEPS Project and its Action Plan in respect of developing countries (Section 2); arguments on why developing countries might perceive fairness in relation to corporate income taxes differently from developed countries (Section 3); and recommendations for international organisations, governments and academic researchers on where fairness in respect of developing countries should be more properly addressed (Section 4)
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    • 1. G20 Leaders Declaration meeting in St. Petersburg including the Tax Annex to G20 leaders declaration; see (last visited 22 March 2017).
    • 2. See 'About BEPS and the inclusive framework', (last visited 22 March 2017). Fairness is one of the tax principles the OECD formulated in its Ottawa Tax Framework, as revised in 2005 by the OECD Technical Advisory Committee (TAC). As to the OECD, 'this principle implies that the potential for tax evasion and avoidance should be minimised while keeping counteracting measures proportionate to the risks involved'. OECD, Addressing the Tax Challenges of the Digital Economy, Action 1 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project (2015), at 17; see (last visited 22 March 2017).
    • 3. OECD, Action Plan on Base Erosion and Profit Shifting (2013), at 8; see (last visited 22 March 2017).
    • 4. The European Commission Recommendation of 6 December 2012 on Aggressive Tax Planning C (2012)8806 Final, at 2.
    • 5. OECD, above n. 3, at 8.
    • 9. In the first part of the Report, the OECD evaluates the impact of the Action Plan in Low Income Countries and it adds other issues that should be considered for these countries that are not included in such action plan (e.g. use of tax incentives by developing countries). In the second part of the Report, the OECD presents the potential actions to assist developing countries to meet the challenges of the most relevant actions of BEPS. OECD, Part 1 of a Report to G20 Development Working Group on the Impact of BEPS in Low Income Countries (2014); see (last visited 22 March 2017). OECD, Part 2 of a Report to G20 Development Working Group on the Impact of BEPS in Low Income Countries (2014); see (last visited 22 March 2017).
    • 10. According to the reporters of medium importance are: - Action 1 - Address the tax challenges of the digital economy; - Action 5 - Counter harmful tax practices more effectively; - Action 8 - Assure that transfer pricing outcomes are in line with value creation - intangibles; - Action 9 - Assure that transfer pricing outcomes are in line with value creation - risks and capital; - Action 12 - require taxpayers to disclose their aggressive tax planning arrangements; - Action 14 - Make dispute resolution mechanisms more effective; and of low importance for developing countries are: - Action 2 - Neutralise the effects of hybrid mismatch arrangements; - Action 3 - Strengthen controlled foreign company rules; - Action 15 - Develop a multilateral instrument.
    • 11. OECD (2014), above n. 9, at 9; see (last visited 22 March 2017).
    • 12. Ibid.
    • 13. Neither the report on Action 15 of the BEPS Action Plan nor the Public Discussion draft mention the allocation of taxing rights. See OECD, Developing a Multilateral Instrument to Modify Bilateral Tax Treaties, Action 15 - 2015 Final Report (2015); see (last visited 22 March 2017) and OECD, Public Discussion Draft BEPS Action 15: Development of a Multilateral Instrument to Implement the Tax Treaty Related BEPS Measures (2016); see (last visited 22 March 2017).
    • 14. These actions deal with hybrid mismatches, treaty abuse, permanent establishment and mutual agreement procedure. According to the OECD, the negotiation in the ad hoc Group was focused on how the Convention would need to modify the provisions of bilateral or regional tax agreements in order to implement those measures. See OECD, A Mandate for the Development of a Multilateral Instrument on Tax Treaty Measures to Tackle BEPS, Action 15 - 2015 (2015); see (last visited 22 March 2017). See explanatory statement to the multilateral instrument (last visited 22 March 2017).
    • 15. See (last visited 22 March 2017).
    • 16. See (last visited 22 March 2017).
    • 17. Countering Harmful Tax Practices more effectively, taking into account transparency and substance.
    • 18. Preventing the granting of treaty benefits in inappropriate circumstances.
    • 19. Transfer Pricing Documentation and Country by Country Reporting.
    • 20. Making Dispute Resolutions more Effective.
    • 21. See (last visited 22 March 2017).
    • 22. I.J. Mosquera Valderrama, 'Legitimacy and the Making of International Tax Law: The Challenges of Multilateralism', 7 World Tax Journal 3, 343, at 382 (2015).
    • 23. See (last visited 22 March 2017).
    • 24. M. Moore, H.O. Fjeldstad, J. Isaksen, O. Lundstøl, R. McCluskey & W. Prichard, 'Building Tax Capacity in Developing Countries', 96 IDS Policy Briefing, Institute of Development Studies (2015).
    • 25. The UN has addressed the BEPS issues from the perspective of developing countries. For this purpose, a questionnaire on BEPS issues was made available also including background papers drafted by legal scholars regarding specific topics. The responses to the questionnaire by developing countries were limited since only Lesotho, Ghana, Tonga and Zambia provided short answers to the questionnaire. Two of the main issues that these countries addressed were the implementation of domestic rules and the administrative capacity. In respect of implementation of domestic rules the countries mentioned the introduction of guidelines to apply the arm's length principle in transfer pricing (Tonga); implementation of tax avoidance rules (Zambia); lack of database to conduct the comparability analysis in respect of transfer pricing (Ghana); to prevent the tailoring of activities by multinationals so that such activities will not be deemed to constitute a permanent establishment in the developing country (Zambia). In respect of administrative capacity, Lesotho made reference to the limited skills to audit some of the highly specialised sectors. See Valderrama (2015), above n. 7, 615, at 619.
    • 26. Regional meeting of the Inclusive Framework on BEPS for Latin America & the Caribbean. Montevideo, Uruguay, 21-23 September 2016. Cochair summary, at 3; see (last visited 22 March 2017).
    • 27. OECD and CREDAF hold regional meeting of the Inclusive Framework on BEPS for francophone countries; see (last visited 22 March 2017).
    • 28. Chair summary 4; see (last visited 22 March 2017).
    • 29. Ibid. Chair summary conclusion.
    • 30. In their Global Framework for Financing Development Post-2015 Program the Heads of State and Government and High Representatives gathered in Addis Abba from 13 to 16 July 2015 recognised 'that significant additional domestic public resources, supplemented by international assistance as appropriate, will be critical to realizing sustainable development and achieve the SDGs'. Furthermore, they committed to 'enhance revenue administration through modernised, progressive tax systems, improved tax policy and more efficient tax collection'; and to 'work on improving the fairness, transparency, efficiency and effectiveness of their tax systems, including by broadening the tax base and continuing efforts to integrate the informal sector into the formal economy in line with country circumstances'; see (last visited 22 March 2017). At the United Nations Sustainable Development Summit on 25 September 2015, world leaders adopted the 2030 Agenda for Sustainable Development, which includes a set of 17 Sustainable Development Goals (SDGs) to end poverty, fight inequality and injustice, and tackle climate change by 2030; see (last visited 22 March 2017).
    • 31. Fairness from a conceptual and an institutional perspective will be the subject of another article from these authors. See 'Fairness: A Dire International Tax Standard with No Meaning?' (forthcoming).
    • 32. Letter of the Senate Finance Committee (Chairman Orrin G. Hatch) and House Ways and Means Committee (Chairman Paul D. Ryan) to the Secretary of the Treasury Jacob Lew of 9 June 2015; see (last visited 22 March 2017).
    • 33. Interview to OECD Pascal Saint-Amans March 2016; see .
    • 34. However, another tax that could also have issues of fairness is the recently (2016) proposed Equalization Levy to impose tax on specific digital transactions. This levy aims to allocate a 'fair share' on the tax of the income obtained in digital transactions. It is not yet clear whether this Equalization Levy will be approved by the Legislative and if it will survive the constitutional challenge in India. It is also not clear how the tax treaties will provide relief to this levy since this levy does not form part of the Indian Income Tax Act of 1961. See, for an analysis of this levy, S. Wagh, 'The Taxation of Digital Transactions in India: The New Equalization Levy', 70 Bulletin for International Taxation 9 (2016).
    • 35. T.P. Ostwal, 'Who Will Adopt the OECD's Plan against BEPS, after All?', Kluwer International Tax Blog (2015); see (last visited 22 March 2017).
    • 36. As acknowledged in OECD (2014), above n. 9, at 20.
    • 37. IMF Policy Paper Spillovers in International Corporate Taxation, International Monetary Fund, Washington, DC, 9 May 2014.
    • 38. Ibid., at 24.
    • 39. 'Options for Low Income Countries' Effective and Efficient Use of Tax Incentives for Investment'. A report to the G-20 Development Working Group by the IMF, OECD, UN and World Bank (September 2015), at 23; see (last visited 22 March 2017).
    • 40. L. Wagenaar, 'The Effect of the OECD Base Erosion and Profit Shifting Action Plan on Developing Countries', 69 Bulletin for International Taxation 2, 84, at 86 (2015).
    • 41. For instance, Wagenaar explains that the 'setting up activities often requires business licences that restrictively list the activities that can be performed by the foreign investor. In addition, there may be obligations to register or get approval for any cross-border contracts that have been entered into by local subsidiaries. Extracting cash from operation companies may require special approvals under foreign exchange control or more general rules controlling foreign investment'. Ibid., at 87.
    • 42. A.W. Oguttu, 'OECD's Action Plan on Tax Base Erosion and Profit Shifting: Part 1 - What Should Be Africa's Response?', 69 Bulletin International Taxation 11 (2015) and see A.W. Oguttu, 'OECD's Action Plan on Tax Base Erosion and Profit Shifting: Part 2 - A Critique of Some Priority OECD Actions from an African Perspective - Addressing Excessive Interest Deductions, Treaty Abuse and the Avoidance of the Status of a Permanent Establishment', 70 Bulletin International Taxation 6 (2016).
    • 43. Ibid.
    • 44. Dealing respectively with limit base erosion via interest deductions and other financial payments, prevent treaty abuse, prevent artificial avoidance of permanent establishment, transfer pricing, disclosure of aggressive tax planning and transfer pricing documentation.
    • 45. For developing countries, more specifically African countries, this author states that 'African countries need to ensure that MAPs function effectively, and that MAPS are transparent and accessible to taxpayers. African tax administrations should set aside funds to train their staff regarding MAPs. They should also be more active in supporting taxpayers who apply for MAPs and should not try to influence taxpayers to give up their right to MAPs, and taxpayers should not be prohibited, as part of settlement negotiations with tax administrations, from claiming the full amount of tax suffered in exchange for not proceeding with a MAP'. A.W. Oguttu, 'Resolving Treaty Disputes: The Challenges of Mutual Agreement Procedures with a Special Focus on Issues for Developing Countries in Africa', 70 Bulletin for International Taxation 12 (2016).
    • 46. M. Lennard, 'Base Erosion and Profit Shifting and Developing Country Tax Administrations', 44 Intertax 10, at 745 (2016).
    • 47. See Valderrama (2015), above n. 22, 381, at 382.
    • 48. I.J.J. Burgers, J.N. Bouwman, N.J. Schutte & A.J. van Herwaarden, 'Pay your taxes where you add the value: how to avoid tax avoidance and abuse? An overview of measures taken and proposed with a special focus on developing countries'. Paper presented at Pay your taxes where you add the value, The Hague, The Netherlands, 2015: 1-61; see (last visited 22 March 2017).
    • 49. This analysis does not address Action 15, the BEPS Multilateral Instrument. For a discussion on the BEPS multilateral instrument, see R. García Antón, 'The 21st Century Multilateralism in International Taxation: The Emperor's New Clothes?', 8 World Tax Journal (2016); and see N. Bravo, 'The Multilateral Tax Instrument and Its Relationship with Tax Treaties', 8 World Tax Journal 3 (2016); see also I. Grinberg, 'The New International Tax Diplomacy', 104 Georgetown Law Journal 1137, at 1196 (2016).
    • 50. The differences in tax systems and tax cultures have been addressed in the past by tax scholars considering that the legal transplant of concepts may result in different outcomes due to the differences in tax systems and tax cultures in countries around the world. See C. Gabarino, 'Comparative Taxation and Legal Theory: The Tax Design Case of the Transplant of General Anti-Avoidance Rules', 11 Theoretical Inquiries in Law 2 (2010); see also I.J.J. Burgers, 'Some Thoughts on Further Refinement of the Concept of Place of Effective Management for Tax Treaty Purposes', 35 Intertax 6/7, 378, at 386 (2016); and see I.J. Mosquera, 'The Interaction of Tax Systems and Tax Cultures in an International Legal Order for Taxation', 5 Diritto e Pratica Tributaria Internazionale 2, CEDAM, Italy, 841, at 869 (2008); and see I.J. Mosquera, Leasing and Legal Culture - Towards Consistent behavior in Tax Treatment in Civil Law and Common Law Jurisdictions, at 352 (2007).
    • 51. Michael Lennard is Chief International Tax Cooperation, United Nations.
    • 52. M. Lennard, 'Base Erosion and Profit Shifting and Developing Country Tax Administrations', 44 Intertax 10, 744, at 745 (2016).
    • 53. The OECD has announced that the first standard that will be reviewed and monitored will be Action 14; see (last visited 22 March 2016).
    • 54. See also F. Debelva and I.J. Mosquera, 'Privacy and Confidentiality in Exchange of Information Procedures: Some Uncertainties, Many Issues, But Few Solutions', Intertax, forthcoming May 2017.
    • 55. See Valderrama (2015), above n. 22, 371, at 377.
    • 56. Terms of reference available at the OECD website; see .
    • 57. These countries are Belgium, Canada, The Netherlands, Switzerland, the United Kingdom and the United States.
    • 58. The countries for which peer review has been deferred until 2020 are Benin, Costa Rica, Egypt, Gabon, Georgia, Jamaica, Kenya, Pakistan, Paraguay, Senegal, Seychelles, Uruguay; see .
    • 59. OECD, BEPS Action 14 on More Effective Dispute Resolution Mechanisms - Peer Review Documents, OECD/G20 Base Erosion and Profit Shifting Project (2016), at 20; see .
    • 60. See, on the use of these guidelines for African countries, Oguttu; see (last visited 22 March 2017).
    • 61. E.g. JinYan Li in her paper 'Protecting the Tax Base in the Digital Economy' written at the request of the UN. She points out the digital economy poses two kinds of challenges to the tax base of developing countries: base erosion due to BEPS strategies; and base cyberization due to the dematerialisation and connectivity features of the digital economy. According to Li, developing countries may need to develop their own measures, such as the taxation of services and royalties, as developing countries, being market countries, tend to be 'net losers' in tax revenue. Li calls for coordination between the UN and the OECD, as the special concerns of the developing countries may not be shared by the OECD. A. Trepelkov, H. Tonino & D. Halka, United Nations Handbook on Protecting the Taks Base of Developing Countries (2015) 3; see (last visited 22 March 2017). For the participation and representation of developing countries and the role of the UN see R.S. Avi-Yonah and H. Xu, 'Evaluating BEPS', University of Michigan Public Law Research Paper No. 493 (15 January 2016); see (last visited 22 March 2017) (discussed in Section 2.3 hereafter).
    • 62. OECD, Measuring and Monitoring BEPS, Action 11 - 2015 Final Report (2015), at 37; see (last visited 22 March 2017).
    • 63. See Valderrama (2015), above n. 22, 371, at 377.
    • 64. The explanatory statement explains the way that the bilateral and regional tax treaties will be modified with the BEPS Multilateral instrument stating that 'The Convention operates to modify tax treaties between two or more Parties to the Convention. It will not function in the same way as an amending protocol to a single existing treaty, which would directly amend the text of the Covered Tax Agreement; instead, it will be applied alongside existing tax treaties, modifying their application in order to implement the BEPS measures. As a result, while for internal purposes, some Parties may develop consolidated versions of their Covered Tax Agreements as modified by the Convention, doing so is not a prerequisite for the application of the Convention. As noted below, it is possible for Contracting Jurisdictions to agree subsequently to different modifications to their Covered Tax Agreement than those foreseen in the Convention'.
    • 65. R. Eicke, 'A BEPS Multilateral Instrument - Practical Solution or Elusive Pipe Dream?', Tax Notes International (2014), at 528.
    • 69. According to its website, an open forum for people to engage with the challenges of building a world where all can flourish; see (last visited 22 March 2017).
    • 70. A group of, at the date of establishment (15 June 1964), 77 and presently 134 developing countries providing the means for the developing world to articulate and promote its collective economic interests and enhance its joint negotiating capacity on all major international economic issues in the United Nations system, and promote economic and technical cooperation among developing countries; see (last visited 22 March 2017).
    • 71. 14th session of the UN Conference on Trade and Development (UNCTAD 14) in Nairobi; see (last visited 22 March 2017).
    • 72. In its declaration form, the Addis Ababa Civil Society Forum on Financing for Development of 12 July 2015, the Civil Society states: 'We reiterate the need and strongly recommend the establishment of an intergovernmental, transparent, accountable, adequately resourced tax body with universal membership that leads global deliberations on international tax cooperation. Such a body will strengthen the ability of developing countries to generate significant sustainable financing for development through, for example, combating corporate tax dodging in developing countries and balancing the allocation of taxing rights between source and residence countries. It should also support the efforts of peoples in developing countries to develop their own progressive, rights-based, equitable tax systems and laws, free of such pressures imposed by lenders and developed country governments', at 4; see (last visited 22 March 2017).
    • 73. UN News Centre, 14 July 2015: UN Negotiations resume on financing framework to advance global development; see (last visited 22 March 2017).
    • 74. This is illustrated by the fact that only one person is permanent staff of the UN Tax Committee, i.e. Michael Lennard. The other participants are members of an Ad Hoc Committee. For an overview of the Committee see (last visited 22 March 2017).
    • 75. T. Nagel, 'The Problem of Global Justice', 33 Philosophy & Public Affairs 2, at 113 and 120 (2005).
    • 76. Ibid., at 146-47.
    • 77. T. Dagan, 'International Tax and Global Justice', SSRN (2016), at 24; see (last visited 22 March 2017).
    • 78. Ibid.
    • 79. Program of the conference; see
    • 80. Other topics also discussed are taxing to promote public goods, tobacco taxes, taxing to promote public goods, carbon taxes.
    • 81. Invitation to the conference available at the website of the World Bank; see .
    • 82. See (last visited 22 March 2017).
    • 83. V. Urinov, 'Developing Country Perspectives on Automatic Exchange of Tax Information', 1 Law, Social Justice & Global Development Journal (2015), Warwick School of Law Research Paper; see (last visited 22 March 2016).
    • 84. OECD (2014), above n. 9, at 1 and 9; see (last visited 22 March 2017).
    • 85. E.g. M. Lennard, 'Base Erosion and Profit Shifting and Developing Country Tax Administrations', 44 Intertax 10, at 745 (2016); and see S.B. Law, 'Base Erosion Profit Shifting - An Action Plan for Developing Countries EPS', 68 Bulletin for International Taxation 1 (2014); see also Y. Brauner, 'BEPS: An Interim Evaluation', 6 World Tax J, at 10-39 (2014).
    • 86. R. Bird, 'Taxation and Development: What Have We Learned from Fifty Years of Research?', DIIS Working Paper International Development Studies (2013); see (last visited 22 March 2017). Most likely these arguments are still valid. R.M. Bird and E.M. Zolt, 'Introduction to Tax Policy Design and Development', World Bank, at 21-23; see (last visited 22 March 2017).
    • 88. Public finance scholars traditionally have defined fairness in terms of horizontal and vertical equity (the quality of being fair and impartial). Horizontal equity is defined by Musgrave and Kaplow as the requirement that equals be treated alike and both define vertical equity as requiring an 'appropriate' pattern of differentiation among unequals. See R.A. Musgrave, The Theory of Public Finance (1959), at 160; L. Kaplow, 'Horizontal Equity: Measures in Search of a Principle', 2 National Tax Journal (Discussion Paper No. 8 5/85, Harvard Law School), at 139 (1989); see (last visited 22 March 2017); quoted by J.R. Repetti and P.R. McDaniel, 'Horizontal and Vertical Equity: The Musgrave/Kaplow Exchange', 10 Florida Tax Review 1 (1993), at 607-22; see (last visited 22 March 2017).
    • 90. In his famous 'Wealth of Nations' Adam Smith formulated the following four Maxims (also referred to as Canons) of Taxation that are necessary for a fair tax system: Maxim of Equality, Maxim of Certainty, Maxim of Convenience and Maxim of Economy. See A. Smith, An Inquiry into the Nature and Causes of the Wealth of Nations (1904); see (last visited 22 March 2017). See also T. Seth, Canons of Taxation Enunciated by Adam Smith - Discussed! (1948); see (last visited 22 March 2017).
    • 91. Press release. First meeting of the new inclusive framework to tackle Base Erosion and Profit Shifting marks a new era in international tax cooperation; see . 'Given developing countries' greater reliance on CIT revenues, the impact of BEPS on these countries is particularly damaging'.
    • 92. S.M. Ali Abbas and A. Klemm, 'Partial Race to the Bottom; Corporate Tax Developments in Emerging and Developing Economies'; see (last visited 22 March 2017). The authors assembled a data set on corporate income tax regimes in fifty emerging and developing economies over 1996-2007 and analysed their impact on corporate tax revenues and domestic and foreign investment.
    • 93. A. Jewell, M. Mansour, P. Mitra & C. Sdralevich, IMF Staff Discussion, 'Fair Taxation in the Middle East and North Africa' (2015); see (last visited 22 March 2017).
    • 94. In respect of fair taxation, the World Bank furthermore is concerned with the fact that governments in many developing countries have taxed the ICT sector at rates significantly higher than other services. World Bank president Jim Yong Kim remarked at the World Bank-IMF Spring Meeting 2016 that one of the three possible ways for Ministers of Finance to contribute to the 'Global Connect Initiative's target of 1.5 billion people added to the internet by 2020' is 'Fair taxation of the telecom sector'. 'Governments need to ensure more reasonable and predictable tax levels'. Remarks by World Bank President Jim Yong Kim at the Global Connect Initiative, World Bank-IMF Spring Meetings 2016; see .
    • 95. See, for the Sixth Method, OECD, 'Transfer Pricing Comparability Data and Developing Countries' (2014); and M.G. Malla and A. Carrera, 'Commodities Transfer Pricing: Revisiting the Sixth Method in Latin America', 25 Transfer Pricing Report 422 (2016).
    • 96. M.I. Espinel Coral, 'BEPS Initiative in Colombia: Transfer Pricing for the Modern World', 23 International Transfer Pricing Journal 4, at 318-22 (2016).
    • 97. Ibid., at 322.
    • 101. According to the OECD these three main pillars are: (1) the direct participation of developing countries and of Regional Tax Organisations in the Committee on Fiscal Affairs of the OECD and all technical working groups; (2) the set-up of Regional Networks of tax policy and administration officials on BEPS in five regions to ensure the participation of countries that are not able to regularly attend the Paris-based meetings; (3) capacity building support, including the development of toolkits, to assist countries implement solutions to tackle BEPS; see (last visited 22 March 2017).
    • 102. See W.A. Mgimwa, 'Speech by the Minister for Finance Introducing to the National Assembly the Estimates of Government Revenue and Expenditure for the Fiscal year 2012/2013', at 60; see (last visited 22 March 2017).
    • 103. G.A. Flores-Macias, 'Chapter 3 The Political Economy of Colombia's 2012 and 2014 Fiscal Reforms', in J.E. Mahon Jr, M. Bergman & C. Arnson (eds.), Progressive Tax Reform and Equality in Latin America, Wilson Center, at 101-27. Specific reference to the role of business associations is made at 108-110; see .
    • 104. Reuters, 'Colombia Tax Reform to Go to Congress in October: President'; see (last visited 22 March 2017).
    • 105. A proposal has been presented in the final report issued in February 2016 by the Tax Experts Commission (the Commission) ad honorem appointed by the government to analyse and propose amendments on tax matters. The final report provides recommendations for the implementation of a structural tax reform. One recommendation is to introduce 'income tax on dividends paid to either residents or non-residents subject to a 20% tax deduction if the dividends are paid out of profits that were taxed at the level of the company; therefore, if the applicable income tax rate for a taxpayer is 35%, the effective income tax rate applicable to dividends would be 15%; if the applicable income tax rate is 20% or less, the dividend will not be taxed' 'Colombia - Tax Experts Commission's final report' (2016).
    • 106. See, e.g. Supreme Court 15 July 1998, No. 31.922, BNB 1998/293, VN 1998/36.4.
    • 107. See, e.g. Supreme Court 29 January 2016, No. 15/00340, V-N 2016/7.17.
    • 108. The Jurisprudence Database of the United Nations Human Rights Office of the High Commissioner; see (last visited 22 March 2017), gives an overview of cases amongst others on Art. 26 ICCPR.
    • 109. See Valderrama (2015), above n. 7, 615, at 623.
    • 110. Remarks by World Bank President Jim Yong Kim at the Global Connect Initiative, World Bank-IMF Spring Meetings 2016 in the context of bridging the 'digital divide': more than four billion people without internet access and 90% of them living in developing countries, 'If we are to bring these sorts of benefits to all countries - and to achieve SDG targets - we have to increase our efforts exponentially. Ministers of Finance can contribute in three ways: First, fair telecom taxation. Governments in many developing countries have taxed the ICT sector at rates significantly higher than other services. Governments need to ensure more reasonable and predictable tax levels'; see .
    • 111. Smith (1904), above n. 90.
    • 112. OECD, 'Implementation of the Ottawa Framework Conditions The 2003 Report' (2003); see (last visited 22 March 2017); Referred to also in the 5 October 2015 Report OECD, 'BEPS Action 1 Addressing the Challenges of the Digital Economy' (2015); see , Annex A and Annex C.
    • 113. R. Murphy, 'A Code of Conduct for Taxation' (2007); see (last visited 22 March 2017).
    • 114. Rawls, justice provides 'a way of assigning rights and duties in the basic institutions of society and they define the appropriate distribution of the benefits and burdens of social cooperation'. A Theory of Justice, Oxford University Press, Oxford, (1971), at 2; See also J. Rawls, 'Justice as Fairness', 67 The Philosophical Review 2, at 178 (1958); J. Rawls, 'Justice as Fairness: Political Not Metaphysical', 14 Philosophy & Public Affairs 3, at 223-51 (1985).
    • 115. See Valderrama (2015), above n. 22, 381, at 358.
    • 116. D. Paolini, P. Pistone, G. Pulina & M. Zagler, 'Tax Treaties with Developing Countries and the Allocation of Taxing Rights', 38 European Journal of Law and Economics 2 (2014).
    • 117. Ibid.
    • 118. A. Turina, 'Information-Based Administrative Tax-Cooperation, Consolidating Standards, Emerging Actors and Evolutionary Perspectives' (Doctoral Thesis defended at Bocconi University Milan 2013).
    • 119. Recently the founder of the non-governmental organisation 'Tax Justice Network' Richard Murphy took the initiative for a FairTaxMark for UK companies. According to the FairTaxMark website, 'fair tax' means that a business seeks to pay the right amount of tax (but no more) in the right place at the right time; see (last visited 22 March 2017).
    • 120. Tax Justice Network stated in 2014: 'in a highly globalised world dominated by large multinational corporations, it is essential to ensure that taxes are paid where the true economic activity occurs. Under current global rules, this is often not the case, and companies are able to shift profits around the globe to places where they will be taxed less. This has a particularly devastating impact on developing countries'. See 17 October 2014; (last visited 22 March 2017).
    • 121. The UN, when explaining BEOS Action 13, stated that the information provided in the transfer pricing documentation (profits earned and tax paid, assets owned and number of employees) may be useful for 'tax authorities trying to identify whether an MNE is leaving an amount of income in a jurisdiction that fairly reflects the economic activity undertaken in that country', at 16; see (last visited 22 March 2017).
    • 122. For the EU Commission, companies should pay taxes where profits are generated and this principle has been undermined by aggressive tax planning. For the Commission, 'The majority of businesses do not engage in aggressive tax planning and suffer a competitive disadvantage to those that do. The aggressive behaviour of these companies distorts price signals and allows them to enjoy lower capital costs, disrupting the level playing field in the Single Market. Small and medium sized businesses are particularly affected by this phenomenon'. Communication from the Commission to the European Parliament and the Council. 'Anti-Tax Avoidance Package: Next Steps towards Delivering Effective Taxation and Greater Transparency in the EU', COM(2016) 23 final, at 2 (28 January 2016); see (last visited 22 March 2017).
    • 123. OECD, 'Aligning Transfer Pricing Outcomes with Value Creation, Actions 8-10 - 2015 Final Reports' (2015); see (last visited 22 March 2017).
    • 124. An interesting example of this broader participation is the November 2016 Regional Meeting of the Inclusive Framework of BEPS for African French-speaking countries. The event was hosted by the Ministry of Economy and Finance of Tunisia, and organised by the OECD in partnership with CREDAF (Centre de rencontres et d'études des dirigeants des administrations fiscales). The World Bank Group was also represented. Participants included senior officials from Ministries of Finance and Tax Administrations from Algeria, Benin, Burkina Faso, Cote d'Ivoire, Democratic Republic of the Congo, France, Gabon, Guinea, Madagascar, Mauritania, Morocco, Senegal and Tunisia, as well as business representatives (PricewaterhouseCoopers, Cabinet Bile-Aka, Brizoua-Bi et Associés) and members from civil society such as the BEPS Monitoring Group and TUAC; see .
    • 125. One of the most active participants regarding BEPS has been the Business and Industry Advisory Committee; see (last visited 22 March 2017).
    • 126. The impact of the BRICS on the international tax regime has been thoroughly analysed in Y. Brauner and P. Pistone (eds.), 'BRICS and the Emergence of International Tax Coordination', IBFD (2015).
    • 127. Ostwal, above n. 35.
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