Presentation

INTERNATIONAL ASPECTS OF
CORPORATE TAXATION
—AN IMF PERSPECTIVE
Michael Keen
7th IMF-Japan High-Level Tax Conference For Asian Countries
Tokyo; April 6, 2016
Outline
• IMF activities in the area
• Importance for developing countries
• Looking
L ki fforward—Some
d S
iissues
IMF activities in the area
A wide range
• Technical assistance
• Analytical work, e.g.
—Scaling ‘BEPS’
Book on international tax issues for the EIs
—Book
• ‘Platform for collaboration on tax’ (IMF,OECD, UN, WB)
—Toolkits
Toolkits
—Wider eye on international tax issues
• Enhanced Fund
Fund-Bank
Bank collaboration
—Explicitly on international tax issues
—Improved tools for tax policy diagnosis
• Increased focus in IMF surveillance
Importance for developing
countries
Scaling the issue
Amplified by
Greater reliance on CIT in developing countries:
20
18
16
14
12
10
CIT in %
total
revenue
8
6
4
2
High income
Low income
And fewer alternatives
Lower middle income
2012
2011
2010
2009
2008
2007
2006
2005
2004
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
1988
1987
1986
1985
1984
1983
1982
1981
1980
0
Looking forward—Some
issues
1. BEPS implementation
• Work to do promoting understanding of what is in BEPS
• Some unfinished business
• BEPS as a package
• Application to developing countries
—Platform and work on toolkits
• Will it address the fundamental concerns?
—Ideal is to raise average
g tax rates but not marginal
g
2. How will the international tax system
evolve?
Pressures will remain, as will interest in alternative
structures:
t t
• European commission reviving its proposal for a form of
formula apportionment
destination based cash flow tax’—
tax
• Academic interest in ‘destination-based
similar to VAT plus wage subsidy
—Not far from direction of reform in many countries
• Greater reliance on personal level taxation?
A lesson learned: It helps to have a sense of where the
system will/should go
3. An elephant in the room? Tax competition
• Incentive to attract tax base and real investment remains…
• …with source-based taxation inherently vulnerable to
d
downward
d ttax competition
titi
• Makingg avoidance harder can amplify
p y the difficultyy
• Some progress in operationalizing notion of ‘harmful tax
competition
competition’
• But can it reach to core of the issue?