/y2010n11

ISSN 1684-9833 • No.11 / July 16, 2010

Update your Agenda

The Executive Secretariat Informs CIAT Executive Secretary participated in the 14th IOTA General Assembly The CIAT Executive Secretary, Márcio F. Verdi, participated in the the 14th General Assembly of the Intra-European Organisation of Tax Administrations (IOTA) . The event was organised and hosted by the Federal Public Service Finance of the Kingdom of Belgium and held in Brussels on 8-9 July 2010.

The Executive Secretariat Informs CIAT Executive Secretary participated in the 14th IOTA General Assembly Working meeting held to update the CIAT Tax Administration Manual ONAT commemorates its fifteenth anniversary The Tax Administrations Inform Brazil - Communications seminar of the RFB and DGFIP was successfully concluded Canada - Minister Ashfield announces a Federal initiative to make things better for business in Canada Spain - E.U. Agreement to strengthen VAT cross-border cooperationl Colombia – Tax collections in Colombia showed positive results in May

One hundred and fifty eight (158) delegates from forty four (45) countries and twelve (12) international organisations attended the Assembly. Among the participants were: Mr. Didier Reynders, Belgium Minister of Finance, Mr. Algirdas Šemeta, EU Commissioner for Taxation and Customs Union, Audit and Anti-Fraud, heads of Tax Administrations, representatives of international organisations, tax practitioners and researchers.

The professional theme of the General Assembly was “New challenges and effects on taxpayer compliance and tax revenues at a time of economic crisis”. The countries who gave technical presentations on this theme were Austria, Bulgaria, Estonia, Ireland, the Netherlands, Slovakia, Spain, Switzerland and the United Kingdom. There was also a panel forum on International Initiatives in the Field of Tax Administration at which IOTA was privileged to have as speakers representatives of the European Commission, the Organisation for Economic Co-operation and Development (OECD) and the International Monetary Fund (IMF).

Costa Rica - Ministries of Finance and Education of Costa Rica, launch national tax education program USA - IRS Requests Public Input on Expanded Information Reporting Requirement Mexico- SAT of Mexico submits tax and management report for the first quarter of 2010 Paraguay - Ministry of Finance of Paraguay presented its Tax Education web page Peru - SUNAT determines that MSEs may issue electronic invoices Dominican Republic - The DGII of the Dominican Republic is considered among the 50 best working places Training Events Publications ¡¿Really?!

14th General Assembly of the Intra-European Organisation of Tax Administrations (IOTA).

eCIAT

Newsletter

Working meeting held to update the CIAT Tax Administration Manual CIAT is a public international organization which groups the tax administrations of 38 countries, (29 Amarican countries, 6 European countries, 2 African countries and one 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.

Executive Council Executive Secretariat

The working group for updating the Tax Administration Manual: Organizational Structure and Management of the Tax Administrations published in 2000, met at the CIAT headquarters in Panama City on June 28-30.

The initial working group that gave origin to this important document was cosponsored by the tax administration of The Netherlands. On this occasion, the CIAT Executive Secretary, Mr. Márcio Verdi, inaugurated the meeting by thanking the participants from The Netherlands for this initiative. The work was coordinated by the CIAT Director of Studies and Training, Ms. María Raquel Ayala Doval.

Participating on behalf of The Netherlands were Messrs. Matthijs Alink, Victor Van Kommer and Patrick Rijsdijk, while the Executive Secretariat was represented by the Head of the Spanish Mission, Mr. Luis Cremades; the Head of the French Mission, Mr. Ángel González and the Tax Research Manager, Mr. Miguel Pecho.

It is expected that based on the work carried out by the Group, the updated version of the Manual may be presented at the Portugal Technical Conference in 2011.

The e-CIAT Newsletter is published and distributed electronically biweekly.

Register

Contact us: CIAT Executive Secretariat / e-CIAT Newsletter P.O. Box 0834-02129 Panama, Republic of Panama.

Phone (507) 265-2766 / 265-5994 Fax: (507) 264-4926 E mail:ciat@ciat.org Web Site: http://www.ciat.org

The CIAT Executive Secretary, Mr. Márcio F. Verdi, is shown with the members of the Working Group for updating the CIAT Tax Administration Manual.

ONAT commemorates its fifteenth anniversary CIAT congratulates the National Office of Tax Administration of Cuba (ONAT) on the fifteenth anniversary of its establishment on June 29, 1995.

We hereby convey our best wishes and congratulations to Yolanda Álvarez de la Torre, Head of ONAT, to her collaborators at the Central Office, a well as the Provincial Offices and Municipal Centers.

eCIAT

Newsletter

The Tax Administrations Inform Brazil - Communications seminar of the RFB and DGFIP was successfully concluded

In accordance with the Technical Cooperation Agreement between Brazil and France, the Secretariat of Federal Revenues of Brazil welcomed the technicians from the General Directorate of Public Finances (DGFIP), Messrs. Pichevin Christian and Philouze Yannick for holding the “Seminar on Institutional Strategic Communication “.

The seminar was held in Río de Janeiro, on June 25 through 27, sponsored by the Superintendency of Federal Revenues of Río de Janeiro, in collaboration with the Social Communication Advisory Office and the General International Relations Coordination Office of the RFB. Its purpose was to continue developing the measures adopted by the RFT, through the exchange of experiences with DGFIP. Brazilian practices were presented, wherein creativity is intensely used as a way of overcoming scarce resources. Also highlighted were the general aspects of RFB’s structure and organization, wherein internal taxes, customs duties and social security contributions are controlled by a single entity formed by various professional groups in a country with a great cultural diversity and a vast territory.

Such is the challenge faced by the RFB’s communication area, which is responsible for disseminating a wide range of information to different internal and external groups.

On its part, France presented the DGFIP’s merger process, wherein internal communications played an important role in the combination of different organizational cultures.

Marcos Aurelio Valadao Correspondent

Canada - Minister Ashfield announces a Federal initiative to make things better for business in Canada The Honourable Keith Ashfield, Minister of National Revenue, Minister of the Atlantic Canada opportunities Agency and Minister for the Atlantic Gateway, is pleased to announce the introduction of a new simplified logbook for motor vehicle expense provisions as part of the government’s overall strategy to assist small and medium sized businesses and Canada Revenue Agency’s (CRA’s) aim to ease the tax compliance burden of small business owners.

“Our government recognizes the importance of small and medium sized businesses to our economy and is continuously making it easier and better to do business in Canada. This new sample logbook will simplify record keeping, significantly reduce paperwork and still provide reliable data to both business owners and the CRA” said Minister Ashfield. “Our government continues to work closely with the Canadian Federation of Independent Business (CFIB) and other organizations to address the needs of small businesses.”

Maria Pica Correspondent

Spain - E.U. Agreement to strengthen VAT cross-border cooperationl During Spain’s term of office as chair of the European Union Council, the draft of the New Version of the VAT administrative cooperation regulation (New Version of Regulation UE 1798/2003), as essential element for the establishment of a coordinated strategy for combating VAT fraud in the European Union was approved. This new regulation will probably enter into force in the last quarter of this year.

eCIAT

Newsletter

The most significant amendments are:

- The creation of EUROFISC, as decentralized network for the prompt exchange of information among experts for combating fraud in the Member States. This new instrument will promote and facilitate multilateral and decentralized cooperation in struggling against specific types of fraud in intra-community VAT fraud, in a selective and prompt manner and, in particular, will facilitate the struggle against the so-called carrousel fraud.

- Establishment of common minimum regulations for all Member States to assign a valid VAT operator number or to declare it void.- Intensified cooperation through increased type of data on intra-community operators which Member States may exchange through electronic media.

- It also introduces improvements in other administrative cooperation instruments already existing, such as previously required, spontaneous or automatic information exchanges, as well as in the application of simultaneous controls by various Member States.

Fernando Díaz Yubero Correspondent

Colombia – Tax collections in Colombia showed positive results in May The National Directorate of Taxes and Customs, DIAN, reported that VAT and withholdings at the source returns were again the main sources of collection of national taxes in May of this year.

Collections in the first five months of 2010 amounted to $28.6 trillion Pesos, as compared to $28.l trillion in the same period of 2009, with a variation of 1.9%. An additional 308 billion were collected from the goal which had been set at $28.3 trillion Pesos. Compliance was 101.1%.

Internal taxes showed an adequate behavior. VAT collection amounted to $7.2 trillion Pesos, as compared to $6 trillion Pesos in 2009. The positive variation was 20.1%. As for the goal of $6.6 trillion Pesos, an additional $594 billion Pesos were collected for a 109% compliance.

Edgar Oswaldo Peña Salamanca Correspondent

Costa Rica - Ministries of Finance and Education of Costa Rica, launch national tax education program As part of the Tax Education Program undertaken by the Ministries of Finance and Public Education the “I pay taxes to my country” hall was inaugurated at the Children’s Museum.

This project has been under development more than a year ago under the coordination of the Ministry of Finance, with the contribution from EUROsociAL Taxation, the Institute of Fiscal Studies of Spain, the Federal Administration of Public Revenues of Argentina (AFIP), the European Union, the Spanish Agency of International Cooperation for Development (AECID) and the Children’s Museum.

Maribel Zúñiga Cambronero Correspondent

eCIAT

Newsletter

USA - IRS Requests Public Input on Expanded Information Reporting Requirement The Internal Revenue Service invited public comment on how to most effectively carry out a law change that, starting in 2012, will require businesses to report a wider range of payments to contractors, vendors and others, usually on Form 1099. These comments will help the IRS issue guidance that implements this provision in a manner that minimizes burden and avoids duplicate reporting.

Under a proposed regulation, many business purchases made with credit or debit cards would be exempt from the new reporting requirement because they are already reported by banks and other payment processors.The IRS seeks comments on additional circumstances in which duplicate reporting might otherwise occur and on rules that would prevent such duplicate reporting.

The change, enacted in March but not effective until 2012, expanded existing reporting requirements to include a business’s payments related to goods and other property, and payments to most corporations. With some exceptions, payments to corporations are currently exempt from this requirement.

Source: IRS - United States

Mexico- SAT of Mexico submits tax and management report for the first quarter of 2010 The Tax Administration Service (SAT) has disseminated its Tax and Management Report which includes an evaluation of its operation and results for the first quarter of 2010.

The main results of January through March 2010 are: •

• •

Tax Revenues. These amounted to 354,1billion Pesos, which represented 101.9% compliance with respect to figures estimated in the Revenues Law. Tax revenues consist of Income Tax, Single Rate Corporate Tax, Tax on Cash Deposits, Value Added Tax, Special Tax on Production and Services, General Import Tax, Tax on New Automobiles, Tax on Oil Yields and others.

Expansion of the taxpayer base. Over one million taxpayers were registered between January and March 2010, thus amounting to a total of 29 million 400 thousand active taxpayers, of which 17 million 460 thousand are wage earners, 10 million 696 thousand are individuals and one million 244 thousand are corporations.

Examination. As a result of appropriate examination strategies that have allowed for improving effectiveness, the quality of audits and their profitability, collection in the first quarter of 2010 amounted to 31.1 billion Pesos, which represented a real increase of 18.8%, with respect to the same period in 2009.

Roberto López Vides Correspondent

Paraguay - Ministry of Finance of Paraguay presented its Tax Education web page With the support of EUROsociAL Taxation, the Ministry of Finance launched its Web page with exclusive Tax Education topics, in addition to presenting the educational videogames “Memo test 1 and 2” and “We are a Team”.

Present in the ceremony was Ángeles Fernández, Director of EUROsociAL Taxation and Borja Díaz Rivillas, in charge of the Tax Education program of EUROsociAL, organization which contributed to the structuring of the Web page, in accordance with the joint work agreement between the Ministry of Finance and the Ministry of Education and Culture.

The page includes an “Area for Children” with interesting activities, games, contests and information in order to make them aware in an entertaining and instructional manner of the social function of taxes, public expenditures and their importance for the country’s welfare.

Elizabeth Fernández de Corrales Correspondent

eCIAT

Newsletter

Peru - SUNAT determines that MSEs may issue electronic invoices The National Tax Superintendency (SUNAT) facilitates taxpayer compliance with tax obligations. Starting on July 19, micro and small enterprises (MSEs) under the Special Income Regime (RER) or General Regime, may issue electronic invoices to heir suppliers.

This tool is intended for MSEs with an annual income equal to or lower than 1,700 UITs (Taxation Unit). In addition, they must have a tax domicile and their activities should not have been temporarily suspended or eliminated, as provided in the Superintendency Resolution N° 188-2010/SUNAT, published in the official gazette.

In order to issue electronic invoices the taxpayer must register in the Electronic Issuance System (SEE) through the SUNAT portal and then enter SUNAT Online Operations (SOL).

One of the main advantages of this new service is that it will no longer be necessary to request authorization for printing invoices, since everything will be registered electronically, thereby reducing costs to the taxpayer.

Likewise, the taxpayer may consult or download, at any time, the electronically generated vouchers. This option will be available for the person issuing as well as the one receiving the invoice.

Another important aspect is that companies affiliated to the SEE will also be able to produce their Sales Record electronically through the SUNAT portal.

On the other hand, taxpayers affiliated to this system will have the option of paying and filing their monthly returns up to the deadline established for Good Taxpayers.

Clara Loza Ramírez Correspondent

Dominican Republic - The DGII of the Dominican Republic is considered among the 50 best working places The General Directorate of Internal Taxes holds the seventh position among the 50 best places to work in the Dominican Republic because of “its working environment”, according to a survey carried out by “Revista Mercado” in its special June edition which was devoted to human resources issues of the country’s businesses.

The DGII proudly receives this recognition on its Anniversary Month. On July 27 the institution will be commemorating its 13th Anniversary, for which reason it will be holding a series of activities throughout the month.

Source: DGII Dominican Republic - Portal

Training CIAT makes New Call for Tutors of its Virtual Courses

The General Directorate of Internal Taxes holds the seventh position among the 50 best places to work in the Dominican Republic.

eCIAT

Newsletter

Events X Edition of the International Taxation Courses. “International taxation vis-a-vis the new world economic scenario”.

19 -23 July, 2010 Madrid, Spain The Institute of Fiscal Studies, Garrigues, Tax Attorneys and Counselors and Landwell, Fiscal Attorneys and Counselors, will be holding on July 19-23, 2010, in Madrid, Spain, the X edition of the Courses on International Taxation, in accordance with the Summer Courses Program of Universidad Complutense de Madrid at El Escorial.es-CEU).

Under the title: “International taxation vis-a-vis the new world economic scenario, an analysis will be made of the way in which the international economic crisis has incorporated a new paradigm in economic relations.

Publications Our documents Information Systems’ Model, ISM-TA The information systems’ model is aimed at the implementation of IT components to enable the Tax Administration to create horizontal workflows and information across the different key areas in the organization, involving all the operational tasks as part of the processes’ flow.

Other documents Tax Gap and Equity in Latin America and the Caribbean Juan Pablo Jiménez, Juan Carlos Gómez Sabaini and Andrea Podestá January, 2010 ECLAC

The aim of this publication is to contribute to the study of an issue that is highly relevant from the point of view of both social and fi scal policies, and yet has received little attention in the region.

¡Were you aware that!...

CIAT Thematic Tax Series No. 3 / March 2009

In its 3th edition, this thematic series covers International Cooperation - Information Exchange The material gathered includes studies and papers prepared by technical officials for presentation either at the General Assemblies or Technical Conferences.

eCIAT

Newsletter

¡¿Really?!

Taxes in the Middle Ages After the fall of the Roman Empire, many free men trusted their smallholdings and surrendered themselves to the great lords landowners or feudal Lord, in exchange for his protection.

Similarly, it was customary for the sovereign granted to his subjects, and large tracts of land officials or fiefs to compensate them for civilian or military services rendered. Thus, a to the eighth century gave rise to these phenomena as the only form of servitude contract or relationship.

Political power was established by land ownership and the number and fidelity of the subjects who had each lord, so many feudal lords boasted more power than the king.

To ensure the protection of the lord, the subjects should give to change many services, especially fight alongside him in frequent wars with the neighbors, and pay large incomes, generally in kind. These rents were imposed by the feudal lords, thus can be considered as taxes.

Levies or charges that were perceived by the holdings of mines, mills, furnaces, forges, forests, pastures, navigable rivers, by hunting and fishing were part of the rights and prerogatives of the king and the feudal lords who constituted manor real monopolies, with this income property.

The victims were part of the domain of the lord or sovereign. Similarly, engaging in trade or industry and have an office were duties that belonged to the feudal lord, and to carry out these activities was necessary permission or license. Which required the payment of an amount contained in the prerogatives of the crown over his subjects, and was known as royalties.

In the last step of the human hierarchy were the serfs, attached to the land, who were obliged to provide work for free, for maintenance of roads, repair of the feudal castle, the land of culture sir, tolls and income taxes of all kinds.

These settlers brought to the castle of Mr. sacks of grain, barrels of wine, jars of oil, chickens, pigs, sheep. And if they did not timely and voluntarily, the hosts of the Lord will take care to seize their products to the force.

When this kind of income, and those obtained through the sale of assets were not sufficient to meet the public and private expenditure of the king, was necessary to resort to subsidies or relief of the subjects.

Source: DGII Portal of the Dominican Republic / Education Tax