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ISSN 1684-9833 • Year 2 / No.10 /December 2, 2011
The Executive Secretariat Informs 4th. CIAT Contest on Innovation in the Tax Administrations The period for the presentation of the proposal is extended until December 31st, 2011 We invite you to CIATalks, the new space provided by CIAT. Read the posts, give your opinion and actively participate.
The Executive Secretariat Informs 4th. CIAT Contest on Innovation in the Tax Administrations II International Seminar of Tax Administrations of the Brazilian States in Salvador, Bahia: Another great success Seminar on “Large Firms Taxation Transfer Pricing” Study Visit to the SAT of Mexico: “Structural and Operative Aspects to Implement Norms on Transfer Pricing” The Tax Administrations Inform Brazil - Secretariat of Federal Income of Brazil (RFB) turns 43 years old Brazil - Media Training of the Federal Income Secretariat of Brazil - RFB completes two years with more than 350 qualified managers Costa Rica - The Income Tax Return with other eyes Ecuador – Environmental Promotion Law and Optimization of State revenues Paraguay - Tax Control is Incorporated into the Quality Management Process Honduras – Import and export by sea will be the best situation to make business according to customs experts and international organizations Peru - Exemptions, unaffected and other tax benefits would add to s/. 10 039 million IBFD News Events Post of the Month New in The Web Ours Documents Other Documents
This annual contest is made by the InterAmerican Center of Tax Administrations and the purpose is to recognize and promote improvement and creativity in the tax administrations. It constitutes concrete evidence of the effect of innovation on their performance that ultimately results in greater public trust. By highlighting exemplary ways of innovative performance of the tax administrations, the Program acts as a catalyst in continuous improvement for satisfying the constant demand faced by tax administrations of finding new and better ways for achieving their institutional objectives. There will be awards for the best three innovations. The implementation of new practices in the tax administrations, especially after they reach greater levels of maturity, take into account varied aspects and frequently these practices contribute to improve efficiency, effectiveness and transparency in management. To this end, innovation will be defined as a new process that may change or improve an existing one, and may cause a significant impact on the tax administration. An innovation may be large or small, originating a totally new process. Or simply, implement changes in an already established process, provided this change may have a significant impact that may be measured in qualitative or quantitative terms. The 2012 awards will be announced and presented at the General Assembly in Santiago, Chile
II International Seminar of Tax Administrations of the Brazilian States in Salvador, Bahia: Another great success The Second Edition of the International Seminar organized by the Bahia State Treasury Secretariat, the Inter-American Center of Tax Administrations - CIAT – and the National Conference of Tax Coordinators and Administrators – ENCAT took place last November 21 – 22, in the City of Salvador, Bahia, Brazil. In this opportunity the main topic was: “The Tax Administrations as Mechanisms for Social Development”.
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Tax Administration Review CIAT/AEAT/IEF N° 31
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.
The Governor of the Bahia State, Mr. Jacques Wagner was in charge of the opening of the event, who was accompanied by important authorities such as the Bahia State Treasury Secretary, Mr. Carlos Martins; The CIAT Executive Secretary, Mr. Márcio Ferreira Verdi; The President of the Brazilian Institute for Ethics in Competition (ETCO), Mr. Roberto Abdenur; the ENCAT General Coordinator, Mr. Eudaldo Almeida de Jesus; the Regional Superintendent of the Bank of Brazil, Mr. Edson Cardozo; the President of the Bahia Regional Council of Accounting, Mrs. Maria Constança Carneiro Galvão; the Attorney General of the Bahia State, Mr. Rui Moraes Cruz; and the Regional Superintendent of the Federal Savings Bank, Mr. Aristoteles Alves de Menezes Jr. Senior national and international officials such as the Spanish Director of the State Agency for Tax Administration, Mr. Jose Maria Meseguer; the Spanish Director of the Institute for Fiscal Studies, Mr. Jose Maria Labeaga were in charge of the presentations; the CIAT Executive Secretary, Mr. Márcio Ferreira Verdi who was in charge of the opening conference; Mr. Miguel Acosta, Director of the Fiscal Training Center of the Internal Revenue Service of Ecuador; Mr. Roberto Abdenur, President of ETCO; Mrs. Maria Fatima Cartaxo, Senior Specialist of the IADB; Mrs. Zayda Bastos Manatta, Assistant Secretary of Federal Revenues of Brazil; Claudio Trinchao - Maranhao State Treasury Secretary; and Mr. Raul Zambrano, CIAT Technical Assistance Manager. The final considerations were in charge of Mr. Isaias Coelho of the Getulio Vargas Foundation who emphasized the most outstanding aspects during the Seminar. Also, Mrs. Maria Raquel Ayala, CIAT Studies and Training Director presented the Handbook for TAs that recently has been published by the Center along with the International Bureau of Fiscal Documentation - IBFD and the Netherlands Tax Administration.
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The events main table counted with the presence of Mr. Jacques Wagner, Governor of the State of Bahia; Mr. Roberto Abdenur, the President of the Brazilian Institute for Ethics in Competition – ETCO; Mr. Eudaldo Almeida de Jesus, ENCAT General Coordinator; Mr. Marcio Verdi, CIAT Executive Secretary, and other authorities.
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Seminar on “Large Firms Taxation - Transfer Pricing” The seminar of regional interchange on the subject “Large Firms Taxation - Transfer Pricing” was carried out in Lima, Peru from November 21st to 23rd, 2011, organized by the CIAT and financed by the Agency for International Cooperation (GIZ) of Germany, with the technical collaboration of the OECD and the co-sponsorship of the National Superintendency of Tax Administration (SUNAT). The event was inaugurated with the words of the Representative of the German Embassy for the German Cooperation in Peru, Mrs. Patricia Schmidt, the Representative of the Vice ministry of Economy of Peru, Mr. Eduardo Sotelo and the SUNAT Superintendent, Ec. Tania Quispe; the participation of experts in transfer pricing of the Tax Administrations of Germany, Brazil, Chile, Costa Rica, Ecuador, Peru, Uruguay and Venezuela; representatives of the Ministry of Economy and Finances of Peru; the Chamber of Commerce of Lima; the Exporter Association of Peru; as well as expert from KPMG and Deloitte & Touch of Mexico; and Ernst & Young and Price Waterhouse Cooper of Peru. On behalf of the OECD participated Mr. Wolfgang Büttner, Specialist in Transfer Pricing; for the German Agency for the Cooperation, Mr. Jörg Wisner, Director of Programs; and for the CIAT, the International Cooperation Manager, Mr. Gonzalo Arias. This activity has been of great value for the participants by virtue of the diversity of experts of the public sector as well as tax advisors and businessmen, which has allowed maintaining productive debates. It is also worth mentioning that the Economist Tania Quispe, when presenting the strategic plan of the organization, has left clear the importance of fortifying actions to increase the capacity of the Tax Administration for the control of international operations, criterion that turns out to be Latin American and worldwide trend. During the days in which the activity was developed, diverse methodologies have been adopted consisting in the presentation of practical cases, group experiences, spaces for the discussion of common interest subjects and group activities to propose projects that could be addressed in a multilateral way. Very ambitious proposals have resulted which, it is hoped, to be shaped in the scope of the CIAT. The subjects that have generated greater interest among the participants were: Structural and operative aspects to implement norms on transfer pricing, Recommendations and experiences to approach sectors of the economy, Strategies to make specific APAs and to optimize the relation Tax Administration-taxpayer. Treatment of the intragroup services and key aspects in the agreements of shared costs.
Participants of the Seminar on “Large Firms Taxation - Transfer Pricing”
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Study Visit to the SAT of Mexico: “Structural and Operative Aspects to Implement Norms on Transfer Pricing� A study visit to the Tax Administration Service of Mexico was carried out in the City of Mexico from November 14th to 16th, 2011, oriented to offer the experience in the matter of control of the abusive manipulation of transfer pricing. This visit has been possible as a result of the integration of efforts by GIZ of Germany and CIAT, and the good predisposition of the SAT of Mexico whose experts have demonstrated high levels of knowledge and dedication to public service. Officials from the transfer pricing areas and from the control of large companies of the Tax Administrations of Colombia, Ecuador, El Salvador, Panama, Peru, Uruguay and Venezuela attended this activity, also, the CIAT International Cooperation Manager and the Director of the GIZ Programs of Germany. The working hours have been intense and of high added value, a variety of complex subjects have been approached, such as: the planning of the stages of a process of transfer pricing audit; the functional and economic analysis; the selection of the appropriate method; the identification of comparable transactions; the technical adjustments; the intragroup services and intangible goods; the management of APAs, BAPAs, MAPAs; the application of the Agreements to avoid the Double Taxation and the analysis of judicial sentences on Transfer Pricing. Due to the success, CIAT and GIZ have considered to stimulate this type of cooperation modality by virtue of the contribution that is offered for the optimization of the routine tasks of the officials from the beneficiary Tax Administrations and the feedback obtained by the Tax Administration that makes available its technical knowledge and experiences.
From left to right, Gonzalo Arias (CIAT), Luis Natera, Rosario Ramos (El Salvador).
Participants from Colombia, Ecuador, El Salvador, Panama, Peru, Uruguay and Venezuela took part to intensive workdays.
Delegates from the various Tax Administrations and organizations gathered at the SAT of Mexico.
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The Tax Administrations Inform Brazil - Secretariat of Federal Income of Brazil (RFB) turns 43 years old Last November 20th, 2011 the 43 years of the RFB was celebrated. The Secretary sent congratulation messages to the officials emphasizing the Institution´s role in the economic and social changes occurred in the Country and the importance of all the colleges in the structure of the RFB. The institutional history of the State Treasury in Brazil begins in 1534, with the creation of the Provedorias da Fazenda Nacional (Supplier of National Treasury). Only 434 years later, in 1968, the RFB appears, a significant advance in facilitating tax compliance originating from the unification of different tax offices. Marcos Aurelio Valadao Correspondent
Brazil - Media Training of the Federal Income Secretariat of Brazil - RFB completes two years with more than 350 qualified managers The advanced training course conceived and exclusively administered by officials of the institution which compose the ASCOM Work Group of Communication - (Assessoria de Comunicação) was successfully completed last November in Belem/Para, Brazil with the participation of the 30º Group of spokesmen who attended the Media Training -MT of the RFB. Marcos Aurelio Valadao Correspondent
Costa Rica - The Income Tax Return with other eyes Paying taxes is, with the vote, the most significant act of democracy. This year the income tax return brings with a series of important new features which are framed in two clear lines of action: to facilitate compliance and fraud control. A software that helps for the submission of returns, Eddi 7, has been developed with which, along with the connectivity project with the banks, it allows to complete the income tax return at home or in the office, upload it to a safe site, generate a receipt number and with that receipt pay online to the bank of your preference. Francisco Villalobos Director General of Taxation Maribel Zuñiga Cambronero Correspondent
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Ecuador – Environmental Promotion Law and Optimization of State revenues In this legal body the environmental tax on vehicular pollution was incorporated. However, the vehicles up to 1,500 cc are not subject to this tax, and the urban transport (buses and taxis), vehicles for disabled people, among others, are exempted. In addition, the motor vehicles of more than 2,500 cc and over 5 years old will receive discounts in the payment for the next 5 years. Also the Value Added Tax (VAT) and Special Consumption Tax (ICE in Spanish) on hybrid vehicles were amended, because their high cylinder does not make them really friendly to the planet. Source: Web site - l SRI Mauro Andino Correspondent
Paraguay - Tax Control is Incorporated into the Quality Management Process On Thursday, December 1st, the beginning of the works for the implementation of a quality system for the inspection process of the Ministry of Finance Sub-secretary of State Taxation in order to access the ISO 9001:2008 Quality Certification, will be officially launched. The event will be held at 9:30 am in the training room at the General Revenue Directorate. In this way, the control sector is added to the quality management control process of the Tax Administration to offer better services to the taxpayers. Source: Web site - SET Elizabeth Fernández de Corrales Correspondent
Honduras – Import and export by sea will be the best situation to make business according to customs experts and international organizations One of the major challenges the country has to overcome the crisis is to seize the opportunities that the economic integration in the hemisphere and the Import and Export can generate. The Government of the Republic through the Executive Revenue Directorate (DEI in Spanish), with the support of the InterAmerican Development Bank (IADB), have initiated the Modernization Project for Customs of Puerto Cortes and other customs in the country. Source: Web site - DEI Grace de la Paz Saravia Correspondent
Peru - Exemptions, unaffected and other tax benefits would add to s/. 10 039 million It is estimated that for 2012, the Tax Expenditures would increased to S/. 10 039 million, equivalent to 1.94% of the GDP projected for that year. SUNAT has published on its website (www.sunat.gob.pe), the Report of the main Tax Expenditure estimates for 2012. These types of systems are preferential tax treatments, which in practice, reduce or cancel the payment of taxes by taxpayers who are affected or are beneficiaries. Source: Web site - SUNAT 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.
Events New Book: “The Case of Uruguay, within a Context of Fighting International Harmful Tax Planning” Autors: Pablo Ferreri; Guillermo Nieves December 8, 2011
On December 8th, 2011, the Law Faculty of the University of Montevideo, Uruguay will make the presentation of the book “The Case of Uruguay within a context of fighting international harmful tax planning”. This paper addresses the adequacy of regulations and administrative measures necessary for the effective exchange of information between tax administrations.
Post of the Month November 17, 2011
CIAT´s New Handbook Written by: Miguel Pecho Trigueros
New in The Web CIAT Thematic Bibliographic
Tax Administration/Human Resources No.6, November 2011 This thematic series presents in its Edition No. 6 the topic of “Tax Administration/Human Resources”. The references compiled in this series are studies developed by technical agents either as presentations on the occasion of general assemblies or technical conferences.
Ours Documents Bibliographic News November, 2011
This document provides for reference purposes, the most recent documents produced by CIAT and other editorials in the month of November; either articles or other periodic publications, research works and studies of interest.
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Other Documents “Centroamérica ante la Gran Recesión: Una política fiscal para el desarrollo, más allá de la estabilidad macroeconómica”
Central America before the great recession - A fiscal policy for development beyond the macroeconomic stability Boletin de Estudios Fiscales No.13 ICEFI August 2011 This study addresses the strengths and weaknesses of the Central American countries before the crisis and the incipient recovery, highlighting the reasons why the crisis was not as severe as it was initially anticipated.
“Estudio de las Reformas Tributarias Recientes en América Central” Study of the recent tax reforms in Central America Dorval José Carías Samayoa Boletín de Estudios Fiscales. No.14 ICEFI August 2011
The great recession in the international economy registered during 2008-2009, not only stopped the highest growth period that the Central American region has had in decades, but also affected the countries public finances by substantially reducing tax revenues. The Government’s response included the promotion of tax reforms that would allow recovering the tax losses.
From Crisis to Recovery The Causes, Course and Consequences of the Great Recession Brian Keeley, Patrick Love OECD November 2011
It explains how a global build up of liquidity, coupled with poor regulation, created a financial crisis that quickly began to make itself felt in the real economy. From Crisis to Recovery, a new book from OECD Insights, explores these issues, tracing the roots and the course of the crisis, how it has affected jobs, pensions and trade, and the prospects for recovery.