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ISSN 1684-9833 • Year 3 / No.22 /November 30, 2012
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The Executive Secretariat Informs Regional Exchange Seminar on “Taxation of large Companies -Transfer Pricing” has successfully concluded
Fifth CIAT Contest on Innovation in the Tax Administrations
The Executive Secretariat Informs Regional Exchange Seminar on “Taxation of large Companies -Transfer Pricing” has successfully concluded The Tax Administrations Inform Argentina- First country to approve the Mercosur Customs Code Bolivia - The SIN intensifies controls on the country’s economic activities Chile – SII’s RSET Program joins BCI
The Agency for International Cooperation (GIZ) of the Federal Republic of Germany, in collaboration with the Inter-American Center of Tax Administrations (CIAT), the International Tax Compact (ITC), the Organization for Economic Cooperation and Development (OECD), the Chamber of Commerce Uruguay-Germany (AHK), with the support of the General Tax Directorate (DGI) of Uruguay, organized a regional exchange seminar in the cycle of “Tax reforms to strengthen social cohesion in Latin America”, on the topic “Taxation of Large Companies - Transfer Pricing”, which took place from November 19 to 21, 2012 in Montevideo, Uruguay. Both the Tax Director General (DGI) of Uruguay, Mr. Paul Ferreri, and the German Ambassador in Uruguay, Mr. Heinz Peters opened the event. Participants were officials of areas responsible for auditing large taxpayers from tax authorities of Chile, Costa Rica, Ecuador, Paraguay, Peru, Uruguay and Venezuela, as well as international experts from Spain, Argentina, OECD, ECLAC and representatives of multinational companies operating in Latin America. The first day consisted in a discussion forum on the development of the legal and administrative systems in countries of Latin America, regarding control of abusive transfer pricing manipulation.
El Salvador – Venue of the XXX Meeting of COSEFIN Ministers Jamaica - Doing Business Report Reflects TAJ’s Improvements in Paying Taxes Mexico - Agreement between the Ministry of Finance and Public Credit and the United States Paraguay - Tax control processes obtain quality certification Bolivarian Republic of Venezuela - The SENIAT participates in the Nation’s Socialist Plan IBFD News Post of the Month Training New in the Web Other Documents
Left to right: The Director of the GermanUruguayan Chamber of Commerce, Isaac Gonzalo Arias, Director of International Cooperation and Taxation, Pablo Ferreri, DGI of Uruguay General Director, Mr. Heinz Peters, Ambassador of Germany in Uruguay, Jörg Wisner, GIZ Director of Projects.
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On the following days working groups were organized, with the purpose of initiating a discussion with representatives of the attending tax administrations and organizations, about an initiative for capturing and sharing public data from Latin American countries, which are useful for the control of large companies or general taxation. This initiative originated from the General Assembly of Quito in 2011 and a meeting was held under the same program last year in Lima (Peru), to determine the availability of public data in the countries of the region. In his presentation of this initiative that aims to create a non-confidential tax interest database, Mr. Gonzalo Arias, CIAT Director of Taxation and Cooperation, highlighted the key role of ITC and GIZ in facilitating the development of this ambitious project and the participation of the countries which are main actors and beneficiaries. In conclusion, it was determined that the project, although ambitious, has a high probability of being implemented and is followed with much interest by CIAT member countries tax administrations. In the coming months, field works will be carried out in cooperation with the tax administrations, to find sources of public information in the region.
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.
Executive Council Executive Secretariat The e-CIAT Newsletter is published and distributed electronically biweekly.
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The Tax Administrations Inform Argentina- First country to approve the Mercosur Customs Code The Chamber of Deputies has approved the Mercosur Customs Code (MCC), after the project was unanimously approved on September 5. This way, Argentina is the first Mercosur country to approve the MCC. When the rest of the Mercosur countries will also approve MCC, the largest Customs Union in the world will be formed. The European Union and the South African Customs Union (SACU) will be second and third. It is noteworthy that during the Pro Tempore Presidency of Argentina in 2010, a final consensus on the draft was reached by the presidents. Now, it is a matter of time when the rest of MERCOSUR member states will incorporate this Community legislation into their national laws, becoming effective throughout the whole territory of the regional bloc. Carlos Alberto Sรกnchez Correspondent
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Bolivia - The SIN intensifies controls on the country’s economic activities OIn order to verify compliance with tax obligations in the country’s economic activities and considering the economic movement that is generated in the end of the year holidays, the National Tax Service (SIN) intensifies its operational control and supervision, so it urges owners to issue invoice for the sale of goods or for the provision of any service even if the client does not ask for it, in order to avoid the closure of their activities. The SIN Executive President, Roberto Ugarte Q., reported that in all capital cities of the country tax control brigades have been deployed at shopping centers to verify if the invoice is being provided to their customers. Juana Patricia Jiménez Soto Correspondent
Chile – SII’s RSET Program joins BCI On November 23, the SII along with representatives of the Ministry of Economy, BCI Bank and suppliers of the bank, met to mark a new progress on the “Tax Corporate Social Responsibility Program “ (RSET in Spanish), with the incorporation of the said financial institution to the project. Along with various previously signed agreements, it allows further progress in improving the competitiveness of micro, small and medium enterprises through the use of new technologies, emphasizing the use of the electronic invoicing system. Director Julio Pereira expressed gratitude to the BCI Bank for joining RSET, as a complement to the many actions the bank has undertaken in fostering the development of its suppliers, including adhesion to the Pro-SME Seal and agreeing to 30-days payment terms conditions with small-size companies. Bernardita Moraga Correspondent
El Salvador – Venue of the XXX Meeting of COSEFIN Ministers El Salvador held the XXX Meeting of Finance Ministers from Central America, Panama and the Dominican Republic (COSEFIN), in which they discussed issues related to the key priorities of the 2013 COSEFIN agenda. During the meeting they discussed the mechanisms and financing alternatives, investment and social spending, as well as other more specific issues regarding tax and customs policy. Ramón Pérez Gómez Correspondent
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Jamaica - Doing Business Report Reflects TAJ’s Improvements in Paying Taxes The continued efforts by Tax Administration Jamaica (TAJ) to make paying taxes easier have resulted in Jamaica improving in the paying taxes index of the latest Doing Business Report (DBR), produced by the International Finance Corporation and the World Bank. The 11 point improvement was due mainly to TAJ, in partnership with the National Housing Trust, National Insurance Scheme and the HEART Trust NTA, allowing employers to make joint payroll payments and reports. Over the last few years, Tax Administration Jamaica has introduced a number of initiatives and programmes aimed at making paying taxes easier. Chief among these is TAJ’s partnering with the other agencies to provide amalgamated service for the payment and reporting of payroll taxes. Meris Haughton Correspondent
Mexico - Agreement between the Ministry of Finance and Public Credit and the United States Department of the Treasury on the exchange of financial information regarding FATCA The Sub-secretary of Finance, Jose Antonio Gonzalez Anaya, and the Assistant Secretary for Tax Policy, Mark J.Mazur, signed on November 19, 2012 in Washington, DC, the Agreement between the Ministry of Finance and Public Credit and the United States Department of the Treasury to improve international tax compliance regarding FATCA (Foreign Account Tax Compliance Act). After two years of negotiations between the governments of Mexico and the United States, both sides agreed to substantially improve the banking and financial information exchange mechanisms to verify compliance with taxpayers tax obligations. Roberto López Vides Correspondent
Paraguay - Tax control processes obtain quality certification The control processes of the Directorate General of Tax Audit and from the Large Taxpayers Directorate under the Sub-secretariat of State Taxation, Ministry of Finance have achieved the Certification under ISO 9001:2008. This certification is in addition to the one obtained last year for collections processes. ISO 9001 is an international standard on good administrative and operational practices. The certificate was obtained through teamwork, involvement of several SET units and the deployment of equipment specially focused on quality which plays a leadership role within the institution. Quality auditors and continuous improvement agents were also trained, who together have supported the challenge and helped to reach success. Elizabeth Fernández de Corrales Correspondent
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Bolivarian Republic of Venezuela - The SENIAT participates in the Nation’s Socialist Plan OIn order to meet the guidelines established in the Simon Bolivar Nation´s Socialist Plan 2013-2019, SENIAT, under the guidelines of the National Customs and Tax Superintendent Jose David Cabello Rondon, together with other public entities, have organized permanent working groups. During the inter-institutional activity, coordinated by the Ministry of Popular Power for Education together with the Ministry of Environment (ICLAM), different programs were presented to be released and develop educational public policies of the levels and modalities of the Basic Education Sub-system, and other educational levels. Pablo Pinto Chávez Correspondent
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.
Post of the Month Tax cultures’ shocks and lags Wednesday, 21 November 2012 Written by Andre Georges Dumoulin
When there is an attempt to transfer tax system changes in an existing “tax culture”, institutional or social conflicts may arise.
Tax Disintermediation 16 November 2012 Written by: Paulo Ogliari
Obviously, the collection of taxes in money is convenient and simple. It is particularly suitable for the collection network and for the State, which happens to have the most convertible asset in any possible currency market. But that convenience brings some drawbacks that are not usually evaluated.
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Taxes and a better living 16 November 2012 Written by : Gaspar Maldonado
Often taxes are seen as ways for the state to raise money aimed at doing works of general interest such as roads, security, etc.; a way of distribution of wealth (subsidies) and in other cases encourage or discourage certain economic activities. But tax can also create or change habits and behaviors of local citizens.
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: •
Course on Human Resources Management 2nd.
If you are interested in participating, please fill out the registration form and send it to capacitacion@ciat.org, along with the rest of the requirements.
New in the Web Bibliographic News November, 2012
This document provides for reference purposes, the most recent documents produced by CIAT and other editorials in the month of October; either articles or other periodic publications, research works and studies of interest.
Other Document Latin American Economic Outlook 2013 SME Policies for Structural Change ECLAC / OECD 2012
In the short term, Latin America will grow at relatively high rates and has room to act counter-cyclically if necessary. However, the region faces a complex medium-term scenario. The lower external demand will expose the limitations of the current growth pattern based on low added value and export of natural resources in many countries of the region. Latin American governments must now take measures, consistent with short-term macroeconomic policies, to strengthen the productive structures and overcome the problems of structural heterogeneity through diversification and a better integration of knowledge.
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Tax Incidence and Tax Reforms in Latin America James E. Mahon, Jr. Woodrow Wilson Center Update on the Americas Wilson Center November 2012
This paper reviews recent literature on tax incidence—that is, the impact of taxes on the distribution of welfare across the society—for the major tax types undergirding Latin American tax systems, for these tax systems as a whole, and for social spending.1 It also asks whether Latin American tax systems are performing satisfactorily—that is, against which standard or by which international comparisons should they be judged. Beyond this, the paper asks what the tax incidence in Latin America reveals about theories of taxation and politics, and what these, in turn, suggest about approaches to reform.
Globalization and Corporate Taxation Manmohan S. Kumar and Dennis Quinn IMF Working Paper International Monetary Fund Octubre 2012
This paper analyzes the extent to which the degree of international economic integration, both financial and trade, affects corporate tax rates. It explores this issue in the context of strategic behavior by countries, taking into account other global and domestic political economy factors.