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ISSN 1684-9833 • Year 1 / No.32 /July 1, 2011

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The Executive Secretariat Informs RF of Brazil and CIAT meet in Brasilia

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The Executive Secretariat Informs CIAT updates its “Analysis of the legal framework for the control of transfer pricing in Latin America” report CIAT/GIZ/OECD SAT of Guatemala Seminar-Workshop on Transfer Pricing and Exchange of Tax Information was Successfully Concluded CREDAF held its 27th General Assembly and 26th International Conference The Tax Administrations Inform Colombia-Control and Sanctions on Net Worth Tax Ecuador - Uruguay Cooperate to Avoid Tax Evasion Ecuador-April 27 is Tax Culture Day in Ecuador Kenya-KRA Impounds Elephant Tusks Kenya - EAC Reads $96m Budget

A meeting was held in Brasilia, Brazil on June 14, with the participation of the CIAT Executive Secretary, Márcio F. Verdi; the Head of the French Mission at CIAT, Isabelle Gaetan; the CIAT Consultant, Decio Carretta; and the following RFT officials: Deputy Secretary, Zayda Bastos Manatta; Deputy Secretary of Customs and International Relations, Ernani Argolo Checcucci Filho; General Coordinator of International Relations, Marcos Aurélio Pereira Valadão; General Coordinator of Programming, Iágaro Jung Martins; acting General Coordinator of Examination, Ricardo de Souza Moreira and acting General Coordinator of Collection and Recovery, Bruno Sergio Silva de Andrade.

Some of the topics discussed were the 2011 CIAT Technical Conference to be held in Lisbon, Portugal next October 24-27, under the main theme of “ Administrative Collection Process as Effective Mechanism for Increasing Revenues “, where the RFB will be making a presentation on: “Models for Organization Collection”. The group also discussed the continuation of the Cooperation Agreement between the RFB and DGFIP of France. Based on the Program, it was agreed that the RFB would make internal consultations regarding the priority issues and would following along the line of training of managers, planning, evaluation and management contracts, topics in which the DGFIP is a specialist. Consideration was also given to the CIAT/IDB Questionnaire on Benchmarking in the Tax Administrations. The identification of best practices in the survey will allow for improvements in several Tax Administrations in Latin America and the RFB collaborates in this process.

Upon conclusion of the meeting, the Secretary of Federal Revenues of Brazil (RFB), Carlos Alberto Freitas Barreto, congratulated the group for their achievements.

Paraguay - University students participate in competition about taxes. “SET of questions” was implemented in Paraguay Peru - Growth of the Economy Allowed a 36% Increase in Income Tax Regularization Peru - Imports Exceeded US$3 Billion of Monthly value in April Czech Republic- The Regional Meeting of the Visegrád Six Countries in Prague Training Events!..

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De Izquierda a derecha: Marcos Aurélio Pereira Valadão, Coordinador General de Relaciones Internacionales; Isabelle Gaetan, Jefe de la Mision Francesa ante el CIAT; Carlos Alberto Freitas Barreto, Secretario de la Receita Federal do Brasil; Márcio F. Verdi, Secretario Ejecutivo del CIAT; Zayda Bastos Manatta, Secretario Adjunto de la Receita Federal do Brasil; Ernani Argolo Checcucci Filho, Subsecretario de Aduana y Relaciones Internacionales de la Receita Federal do Brasil

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The Tax Administrations Inform Canada - Electronic Filing Continues to be the Popular Choice for Canadians The Canada Revenue Agency (CRA) announced that preliminary tax-filing season numbers show that Canadians are increasingly choosing electronic filing as their preferred method for filing their income tax and benefit returns.

In fact, the number of people filing electronically has increased compared to the same time last year. Of the 24.5 million returns received as of May 31, 15.9 million were filed using EFILE, NETFILE, or TELEFILE, compared to 15.2 million last year.

María Pica Correspondent

Costa Rica - Government Submitted Substitutive Text of Tax Solidarity Bill

CIAT is a public international organization which groups the tax administrations of 40 countries, (31 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.

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The Executive Body disseminated the main guidelines included in the substitutive txt of the Tax Solidarity Bill, to be compiled in a motion signed by several legislative factions which total 30 members of Parliament.

On referring to the new text, the Ministers of the Presidency and Finance, Carlos Ricardo Benavides and Fernando Herrero, respectively, stated that it is the result of an extensive dialogue that has brought about consensus with respect to the concerns of different social and political sectors as well as the Government, on a national interest issue calling for an unpostponable solution.

Maribel Zuñiga Cambronero Correspondent

Czech Republic - Minister of Finance Awarded TOP 20 Legal Entities The Ministry of Finance of the Czech Republic and the General Financial Directorate arranged the traditional meeting with the delegates of legal entities, which most significantly contributed to the national budget in 2010.

As Mr. Miroslav Kalousek, the Minister of Finance, said, it was a symbolic award of 20 legal entities, which contributed to the national budget more then 30 percent of the total revenue of corporate income tax.

This symbolic award and acknowledgement was presented by Mr. Miroslav Kalousek, the Minster of Finance and Mr. Jan Knížek, the Director General of the General Financial Directorate on 12th May 2011.

Bronislav Mikel Correspondent

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France - Minister of Finance of France, Christine Lagarde, New IMF Managing Director The Executive Board of the International Monetary Fund (IMF) today elected the 55-year old Minister of Finance of France, Christine Lagarde, as the new Managing Director.

Christine Lagarde’s appointment will be for a five-year period that will begin on July 5. She will be the first woman to head the multilateral institution.

To replace Christine Lagarde, the President of France, Nicolas Sarkozy, appointed 46-year old François Baroin, formerly in charge of the Budget Ministry and Government spokesman, as new Minister of Economy, Finance and Industry.

In turn, Valérie Pécresse will replace Francois Baroin in the Ministry of Budgets, Public Accounts and State Reform, as well as spokesperson for the French Executive body. Until her appointment, Valérie Pécresse was the Minister of Higher Education and Research.

Guatemala - IV Citizen Culture Festival “Together We Can Do Much More” was successfully held The “Together We Can Do Much More” Citizen Culture Festival was held for the fourth consecutive year in Guatemala A lecture and folkloric presentation were the initial activities of the “Together We Can Do Much More” Citizen Culture Festival held on May 26 in the capital city for the fourth consecutive year, which brought culture, values and citizenship to Guatemalans, especially the youth and children.

According to the Mexican Ambassador, Eduardo Ibarrola Nicolín, who lectured on “Tax compliance: through coercion or conviction,” children should be taught since their early school years, about the obligation of all Guatemalans to contribute to the country’s development, to thereby strengthen their values.

Manfredo Chocano Alvarado Correspondent

Guatemala - Seminar on Municipal Collection is Held Representatives from over 20 institutions and municipalities from throughout the country participated in the forum “Integral Municipality: Promotion of tax collection at the local sphere”. It was held in Coban on June 1 and 2, promoted by the Superintendence of Tax Administration and sponsored by the German International Cooperation - GIZ Tax Policy Project.

This activity is a continuation of cooperation efforts undertaken by SAT with several municipalities and entities, with a view to strengthening tax collection at the municipal and national levels.

Manfredo Chocano Alvarado Correspondent

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Paraguay - Contest on Tax Issues Generates Interest among Paraguayan University Students The contest on questions regarding tax issues, undertaken by the State Undersecretariat of Taxation, a dependency of the Ministry of Finance of Paraguay, has generated great interest among university students, for whom this second cycle of the television program is intended.

SET of question is the first student contest on tax issues held in the country, for the second consecutive year. Its purpose is to promote tax education among the youth, within the framework of the establishment of a tax culture in Paraguay.

Elizabeth Corrales Correspondent

United States of America - The Internal Revenue Service plans to move against “one or more banks” In its crackdown on offshore tax evasion this summer, IRS Deputy Commissioner for Services and Enforcement Steven Miller said said some comments June 7.

Miller’s comments come as IRS is increasing that crackdown and encouraging taxpayers to come into its voluntary disclosure program for offshore assets. He said the banks targeted by IRS are “not limited to any geographic locale,” and said taxpayers can expect more news “in a month or so.”

In the disclosure arena, Miller said IRS currently has hundreds of “quiet” disclosures under review made by taxpayers who filed amended returns and reports of their foreign bank accounts (FBARs) without affirmatively telling the agency they were disclosing their assets.

Raúl Pertierra Correspondent

United States of America - 55 Reviews By Global High Wealth Group Under Way Addressing other international issues, Miller said OECD’s Forum on Tax Administration is focusing carefully on large businesses, transfer pricing, and high-net worth individuals, and said IRS’s Global High Wealth Industry Group currently has 55 enterprises under review.

He noted that IRS is pulling in experts on partnerships, international issues, and pensions to help with the scrutiny, and “I would expect us to continue building the group.”

Issues of residency, sourcing, use of the foreign tax credit, and even transfer pricing are being raised, Miller said.

The IRS official also discussed ongoing efforts to perform joint audits, noting that two are under way between the United States and other countries, while several are ongoing between non-U.S. countries at the moment.

Raúl Pertierra Correspondent

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Thesis Series The Executive Secretariat with the aimed to keep informed those people interested in the taxation affairs of our member countries and associate members countries has elaborated the new editorial series “Thesis Series”, which will diffuse postgraduate research done by the members of the community “MiCiat”

A Contribution to Strategic Management: The Approach to Value Creation Adrian Jorge Minetto Thesis Series No. 1 June 2011

The report aims to help develop the management of tax administration in order to succeed in creating value for citizens by promoting efficiency and effectiveness in the management.

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Bibliographic News June, 2011

This document provides for reference purposes, the most recent documents produced by CIAT and other editorials in the months of june; either articles or other periodic publications, research works and studies of interest.

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Welcome to the Library CIAT offers its On-line Library “Jorge Eduardo Corradine” where you may access an impressive collection of documents and publications on tax issues which the Center and other publishers have produced in print and/or electronic versions, as pdf documents, PowerPoint or other formats.

This service can be accessed freely. To consult the materials you simply need to register in the Tax Information Service at “My CIAT”. If you have not registered yet, you may do it now by clicking this link and filling out the form. It is fast and easy.

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Other documents OECD amends Multilateral Convention on Mutual Assistance in Tax Matters OECD June, 2011

OECD has announced that amendments have been made to the Multilateral Convention on Mutual Administrative Assistance in Tax Matters which open the Convention to all countries, allowing them to join the Convention for cross border tax cooperation and information sharing.

Economic Policy Reforms 2011. Going for Growth OECD April, 2011

The OECD Transfer Pricing Guidelines for Multinational Enterprises and Tax Administrations (“TPG”) provide internationally accepted guidance on the application of the arm‟s length principle set out in Article 9 of the OECD and UN Model Tax Conventions. The TPG were originally approved in 1995 and were substantially revised in 2010.

Staying the Course on Fiscal Adjustment Carlo Cottarelli, Director, Fiscal Affairs Department Fiscal Monitor Update June 17, 2011

Consolidation is proceeding at a broadly appropriate pace in many advanced economies notably in most of Europe and in Canada helped by recovering activity and revenues.