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ISSN 1684-9833 • Year 5 / No.16 /September 13, 2013
The Executive Secretariat Informs
The Executive Secretariat Informs Eurosocial II Program organizes a meeting on “Massive Control” based on the experience of AFIP in Argentina The Inter-American Develop Bank Hosts an International Taxation Seminar XI Edition of the International Master in Tax Administration and Public Finance - Deadline for registration is extended The Tax Administrations Inform Bolivarian Republic of Venezuela – Successfully joins Mercosur in customs Bolivia – The SIN collected Bs 33.034 million until August, 24% more than in 2012 Brazil – The Federal Revenue participates in the OECD comparative study ontax administrations Canada – Harper Government announces new measure to reduce red tape for small businesses Colombia – and United States sign an agreement for a safe and efficient international trade Colombia – The training on transfer pricing for Auditors of the DIAN supported by the OECD, the World Bank and the European Commission continues Dominican Republic – Internal Revenue collected RD $ 184,932.7 million in the January-August 2013 period Paraguay – The tax authority collected 11.2% more in August Peru – Central government tax revenue totaled S/. 7214 million in August
Eurosocial II Program organizes a meeting on “Massive Control” based on the experience of AFIP in Argentina A “south-south exchange tour “on “massive control” was held on August 27 to 30, 2013 in Buenos Aires, based on the long-term experiences of the “Federal Administration of Public Revenue (AFIP) “of Argentina. Given the importance of this topic in terms of associated and transversal processes, a flexible program with multiple approaches was adopted, addressed by senior officials and work teams of the institution. This activity was attended by CIAT and tax administrations officials from Bolivia, Colombia, Costa Rica, Ecuador, El Salvador, Spain, Guatemala, Peru and Uruguay; they actively participated in the debates and presented their experiences on different aspects of the program. Among the main points highlighted were the following: taxpayer registration, tax account , noncompliance control , identification and use of third-party information sources , criteria and procedures for segmenting taxpayers for collection and monitoring, electronic control system, electronic reporting , and information technology applied to massive controls . Regarding the working procedures of EUROsociAL II framework, the following was mentioned: exchange visits, meetings, technical assistance and studies. In all cases, future activities will adopt a narrower focus on specific processes referred to taxpayers’ massive control, while maintaining a vision that addresses general and specific needs. The meeting has been held as a result of the demands presented by beneficiary countries to the Eurosocial II Program, in the framework of the Action “Compliance with Tax Obligations “of the Area“ Public Finance“, coordinated by the FIIAPP, which partners are AEAT of Spain, IEF of Spain and CIAT. In the future, the CIAT and the Eurosocial II Program will follow up the progresses, requests and interests presented by the beneficiary tax administrations, in order to organize new activities to support voluntary compliance.
IBFD News Training Events Post of the Month Other Documents of interest Group photo.
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Welcome words by Sr. Jose Bianchi, General Collection Subdirector of AFIP.
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CIAT is a public international organization which groups the tax administrations of 39 countries, (31 Amarican countries, 5 European countries, 2 African countries and 1 Asian country), for the purpose of providing an integral service for the modernization of those administrations, by promoting their evolution, social acceptance and consolidation through the exchange of knowledge, experiences and the rendering of specialized technical assistance.
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The Inter-American Develop Bank Hosts an International Taxation Seminar During the dates of August 29-30, the Inter-American Development Bank (IADB) hosted a seminar on International Taxation with the primary themes being the United States Foreign Account Tax Compliance Act (FATCA) and information on taxation issues in Latin America and the Caribbean. The latter being captured in the recent IADB publication titled “More than Revenue” and in the CIAT, IADB, CAPTAC-DR, joint publication on the “State of Tax Administration in Latin America 2006-2010.” The event took place at the IADB headquarters in Washington, DC and was co-sponsored by the IADB, US Treasury Department and Internal Revenue Service (IRS), and CIAT. In attendance were over 50 senior tax administration, ministry of finance and government banking officials from Latin America and the Caribbean. Among CIAT member countries, present were the Director Generals from Barbados, Colombia, Costa Rica, Surinam and other officials. On the first day, US Treasury Department and IRS officials made detailed presentations on FATCA-related issues. Ms. Danielle E. Rolfes, International Tax Counsel, provided information on the US law, as well as, required actions by the involved foreign finance institutions. (The statute goes into effect on July 1, 2014.) A significant amount of time was allocated to options exercised by some governments to enter into an Intergovernmental Agreement (IGA) with the US. These agreements would be in the nature of an automatic exchange agreement and would required financial institutions reporting directly to their governments rather than to the US IRS. The countries would in turn exchange this information automatically with the US IRS. Regarding the administration of these agreements, Mr. Michael Danilack, IRS Deputy Commissioner (International), made an excellent presentation on how these complex agreements would be executed and administered. Both the financial institution agreements as well as the intergovernmental automatic exchange agreements require detailed planning and certain levels of IT systems sophistication. A discussion panel followed these presentations where Brazil, Chile, and Mexico spoke on their actions to enter into intergovernmental agreements with the US and actions being taken by financial institutions in their countries. The second day of the seminar were dedicated to presentations on Latin American tax issues and the previously cited publications. Presentations were made by Alberto Barreix from the IADB and Socorro Velazquez from CIAT. Guest speakers included Mr. Michael Keen from the International Monetary Fund (IMF) and Dr. Vito Tanzi, former Director of Fiscal Affairs at the IMF.
From left to right: Moderator: Alberto Barreix: Principal Technical Leader, IFD/FMM – IADB; Brett York, Attorney-Advisor, Office of the International Tax Counsel, U.S. Dept. of the Treasury; Elena S. Virgadamo, Attorney-Advisor, Office of the International Tax Counsel, U.S. Dept. of the Treasury y Danielle E. Rolfes, International Tax Counsel, U.S. Dept. of the Treasury.
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Eurosocial II: Strengthening Human Resource in the Costa Rican Tax Administration From August 19 to 23, 2013, the CIAT held the second specialized technical advisory mission to the Tax Administration of Costa Rica, under the Eurosocial II program. Mrs. Isabelle Gaëtan, Head of the French Mission at CIAT and Mrs. Maria Raquel Ayala, CIAT Director of Training and Development of Human Talent, were responsible for this activity, which purpose was to review the progress of the four strategic aspects discussed in the first mission: reorganization of the human potential-training area, manual of courses and functions, evaluation on performance and productivity indexes, and telecommuting, according to the schedule established by the Administrative and the Ministry of Finance Directorate, leading the pilot Project on Strengthening Human Resources at the DGT of Costa Rica. In this sense, a unique Institutional Class Manual has been drafted and was presented to the Civil Service Officials and to the Managing Committee and endorsed by the authorities of the Ministry of Finance. The implementation of this Manual will be a historical event for public officials of the Costa Rican administration, and could be adapted to any public institution in Costa Rica. In this phase of the mission sponsored by Eurosocial II in collaboration with the CIAT, Mrs. Gaëtan and Mrs. Ayala’s experiences have been essential and have enriched the study that the project team of officials from the Finance Ministry of Costa Rica is performing.
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XI Edition of the International Master in Tax Administration and Public Finance - Deadline for registration is extended The registration deadline for the XI edition of the International Master in Tax Administration and Public Finance has been extended to September 15, 2013. This is an initiative of the Spanish Tax Administration (Institute of Fiscal Studies and State Tax Administration Agency), the Inter-American Center of Tax Administrations (CIAT), the Center for Economic and Business Studies (CECO), The Distance Education National University of Spain (UNED), the CEDDET Foundation and the Spanish Agency of International Cooperation for Development (AECID), which responds to the need for contributing to the technical and managerial training of the IberoAmerican Tax Administrations staff. For further information please write to maestria.inter@ief.minhap.es
The Tax Administrations Inform
Bolivarian Republic of Venezuela – Successfully joins Mercosur in customs Venezuela has successfully integrated to the common market of the South (Mercosur), in customs matters, since the expectations of plans and projects developed during the LXXX technical Committee meeting N ° 2 on Customs Affairs and the Customs risk management working group were surpassed, coordinated by officials of the national integrated service of customs administration and tax (SENIAT), which was held in Caracas with the participation of delegates from Argentina and Uruguay. Pablo Pinto Chávez Correspondent
Bolivia – The SIN collected Bs 33.034 million until August, 24% more than in 2012 The national tax service managed to raise an amount of Bs 33.034,9 million, until August 2013, a 24 percent increase compared to the similar period of previous year, said its Executive President, Erik Ariñez Bazán. He explained that the net increase achieved in the collection is equivalent to Bs 6.427,2 million and is the result of the increase of 24 percent in revenues in the domestic market, as a result of the dynamism and smooth running of the Bolivian economy and the tasks performed by the SIN in the control, follow-up and tax control, the adoption of technological tools that facilitate the payment of taxes and the intensity of the tax culture campaigns. Juana Patricia Jiménez Soto Correspondentl
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Brazil – The Federal Revenue participates in the OECD comparative study ontax administrations The Organization for Economic and Cooperation Development (OECD) published the report “Tax Administration 2013: Comparative Information on OECD and Other Advanced and Emerging Economies” This is the fifth edition of what was formerly known as Comparative Information Series (CIS). It consists of additional information about the tax administrations of OECD Member countries and other relevant countries. It is an important source on tax systems and their administrations, which main purpose is to provide information to facilitate the dialogue between the tax authorities and also for identifying opportunities to improve the Organization and administration of the Revenues units. This edition includes 52 economies (including the OECD, the European Union and the G- G20 countries), highlighting the first participation of Brazil, Colombia and Hong Kong, China. Flávio Antonio Araújo Correspondent
Canada – Harper Government announces new measure to reduce red tape for small businesses The Honourable Kerry-Lynne D. Findlay, P.C., Q.C., M.P., Minister of National Revenue, and Ryan Leef, Member of Parliament for Whitehorse, announced a new online mail service for Canadian small businesses that will help streamline their interactions with the Canada Revenue Agency (CRA). The new mail service uses the CRA’s secure online service, My Business Account, and is just one of many CRA initiatives to reduce red tape for Canada’s job creators. Complete note Maria Pica Correspondentl
Colombia – and United States sign an agreement for a safe and efficient international trade The Director General of the Directorate of national taxes and customs - DIAN, Juan Ricardo Ortega, signed in Washington a collaboration agreement with the United States Department of Homeland Security, Janet Napolitano, to promote a safer and more efficient international trade The Director of the DIAN, on behalf of the Ministry of finance and public credit, together with Secretary Napolitano formalized two statements. Patricia Parada Castro Correspondet
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Colombia – The training on transfer pricing for Auditors of the DIAN supported by the OECD, the World Bank and the European Commission continues With a participation of 30 officials of DIAN, the fifth workshop on transfer pricing, the second of this year, was held last July 30 and August 1, 2013 in order to continue with the process for strengthening the expertise team in charge of investigations, focused on improving the control skills and techniques. Also the workshop allowed sharing different experiences from questions, doubts, opinions and presentations of cases of officials in the control and settlement process located in the International control Sub-directorate, in the Directorates of the taxes of Bogota and large taxpayers and in the Legal Directorate. This time, the people in charge of sharing their experiences with the team of the DIAN were Dr. Lee Corrick, OECD Senior Advisor and Dr. Blanca Moreno-Dodson, World Bank Economist leader. Patricia Parada Castro Correspondent
Dominican Republic - Internal Revenue collected RD $ 184,932.7 million in the January-August 2013 period The Directorate General of Internal Taxes (DGII) reported revenues collected during the period January to August 2013, which reached RD $ 184,932.7 million, an increase of RD $ 14,163.1 million compared with the same period last year. Regarding the state budget goal, the institution has a performance of 97.5%. Nieves Vargas Collado Corresponsdent
Paraguay – The tax authority collected 11.2% more in August Tax revenues recorded in August 2013 through the State of taxation sub-secretariat (SET) of the Ministry of Finance totaled 496.303 million guaraníes, higher by 11.2% compared to what was collected in the same period of last year which was G.446.283 million. Comparing only income verified from August 15 to 30 of the same month (G. 304.520 million), the collection increased by 24.4% over the same period in 2012 (G. 244.867 millions). Elizabeth Fernández de Corrales Correspondent
Peru – Central government tax revenue totaled S/. 7214 million in August In August, the Central Government Tax Revenues reached S /. 7214 million, an increase in S /. 662 million compared to August 2012 and achieving a growth of 6.6% in real terms (Chart No. 1 and No. 2). This significant increase in August is mainly due to higher revenues generated from non-primary sectors, the dynamism of GDP and domestic demand, as well as to the SUNAT management. This increase has helped to compensate a lower collection from primary sectors, especially in the mining sector which exports are affected by lower international prices of metals. Clara Urteaga Correspondent
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IBFD News International Bureau of Fiscal Documentation (IBFD) Cooperation-CIAT - IBFD
This section includes a selection of the IBFD news about aspects of tax policies and tax administration. This information is available on the CIAT website and in Fridays Tax News alert.
Training Announcement of Course Given the importance we attribute to continued training in order that tax professionals may be fully updated on tax administration, customs and human resources issues we are announcing the following course: •
Tax Audit Fundamentals, 3rd Edition
If you are interested in participating, please fill out the registration form.
Events 2013 Uckmar Visiting Research Scholarship in International Tax Law Fondazione Antonio Uckmar
The “Fondazione Antonio Uckmar” provides a scholarship at our Institute for Austrian and International Tax Law to foster this strategy and enhance international cooperation to the mutual benefit. This scholarship enables a young, talented student focusing on European or international tax law to participate in the “Visiting Research Scholar Program” at our Institute.
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Post of the Month 11 September 2013
Memories of Africa Written by: Raul Zambrano At the 2013 Technical Conference I had the opportunity to comment on the presentations on tax audits in the digital era made at the inaugural session by Jaco Tempel, from the Tax and Customs Administration of The Netherlands and Enrique Sรกnchez-Blanco from the Spanish State Agency of Tax Administration.
Other Documents of interest Ideology and Taxation in Latin American Lorena Caro, Ernesto Stein Inter-American Development Bank May 2013
This paper examines the impact of ideology on tax revenues in Latin America, using a panel of 17 countries from 1990 to 2010. As a first approach, a fixedeffects model is used to identify the impact of ideology on taxation.
Finance & Development International Monetary Fund September 2013
This issue of F&D explores the world of natural resource management and puts forward new ideas for sustaining resource revenues over the long haul, to support steady economic growth.
Effective Personal Tax Rates on Marginal Skills Investments in OECD Countries a New Methodology Bert Brys, Carolina Torres Agust 2013
This paper presents a new methodology to calculate effective tax rates on the marginal return on an investment in skills within a discounted cash-flow investment framework. This approach takes into account costs including forgone labour earnings and the direct costs of skills formation, as well as the earnings premium and the return of an alternative investment in capital income. The earnings premium necessary to pursue a skills investment is calculated endogenously.