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ISSN 1684-9833 • Year 3 / No.3 / February 17, 2012

The Executive Secretariat Informs The Executive Secretariat Informs Announcement for contributions to the N° 33 Edition of the Tax Administration Review CIAT participates in the Sub-group on State Development, Tax and Assistance of the International Initiative “Task Force on Tax and Development” CIAT attends the 4th “Core Group” Meeting the initiative “International Tax Compact” (ITC) The Tax Administrations Inform Brazil - Ambassador of Panama visits the Secretary of the Federal Revenue of Brazil - RFB Dominican Republic - Dominic Republic - Latin American Countries wish to replicate the Technological Development of the General Directorate of Internal Taxes Ecuador -Institute of Fiscal Studies provided technical assistance to Ecuador El Salvador - Ministry of the Treasury undertakes dissemination of the Tax Code and Income Tax Law

Announcement for contributions to the N° 33 Edition of the Tax Administration Review I am pleased to contact you once again and invite you to send your contribution to the No.33 edition of the Tax Administration Review published by the CIAT together with the Agencia Estatal de Administración Tributaria and the Instituto de Estudios Fiscales.

The topics approved by the Editorial Board for the No. 33 edition are: 1. Examination and control mainly of such areas of interest as exporters, banks and financial institutions, extraction of natural resources, agriculture, construction, tourism, and telecommunications.

2. Impact on collections of recovery and examination activities of the tax administrations.

3. Effective implementation of international exchange of tax information.

4. Transparency of information: how tax administrations face problems associated with tax secrecy, bearer shares, tax havens, among others.

Honduras - DEI Trains staff for Providing Taxpayer Assistance in new Agencies

5. Planning in the Tax Administrations:strategic and operational indicators. The balanced scorecard and management by objectives.

Honduras - International Organizations, Private Businesses and the Public Sector have joined efforts to speed up Regional Trade

6. Control and internal audit systems in the Tax Administrations.

Peru - SUNAT will Strengthen Control, Facilitation and Tax Culture Actions with new Organizational Structure South African Trade Statistics for December 2011 IBFD News Events Information Post of the Month Training Our documents Other Documents

7. Neural networks and risk analysis: deterministic and probabilistic predictive models for selecting of cases for audit and collection.

8. Incorporation of biometric data in the taxpayer file.

If there is a contribution dealing with a topic other than those approved by the Editorial Council, please contact directly the Tax Studies and Research Director, Miguel Pecho (mpecho@ciat.org), to evaluate the relevance of the contribution in question The deadline expires on April 13, 2012. Additional details may be found at our web site.

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Tax Administration Review CIAT/AEAT/IEF N° 31

CIAT participates in the Sub-group on State Development, Tax and Assistance of the International Initiative “Task Force on Tax and Development” The annual meeting of the sub-group on state development, tax and assistance took place on February 7-8, 2012, at the OECD Headquarters located in Paris.

After more than two years of inauguration of the initiative “Task Force on Tax and Development” integrated by several international organizations with focus on policy and tax administration, representatives of different scopes of governments of Africa, America, Europe and Asia, ONGs interested in tax topics and diverse representatives of the civil society, they have met to discuss critical issues related to the role of the governments and the international community in the development of tax administration policies.

Among the critical topics that were discussed are management of tax incentives, increase of transparency levels, commitment of the international community in tax development, progress achieved in ethics and tax education, and actions by international organizations and the civil society to address needs in the tax scope.

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.

Executive Council Executive Secretariat

According to the comments by Mr. Socorro Velazquez (Planning and Institution Development Director) and Gonzalo Arias (International Taxation and Cooperation Manager), who have participated as CIAT representatives, this meeting has been of great value, not only for the possibility of presenting present and future actions in the international cooperation scope for the development of tax administrations, but also for the opportunity to be able to identify common interests with organizations active in the same regions, which will allow to move forward in joint coordinated actions for the benefit of the CIAT member countries .

Finally, in the last panel, the main conclusions and steps to follow were briefly presented in order to obtain results in the discussed areas, which will be made available in the next days by the Secretariat of the initiative “Task Force on Tax and Development” for their consultation.

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Photo: Participants in the meeting of the Sub-group on State Development, Tax and Assistance of the International Initiative “Task Force on Tax and Development”

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CIAT attends the 4th “Core Group” Meeting the initiative “International Tax Compact” (ITC) On February 8th, 2012, the 4th “Core Group” Meeting of the ITC took place at the OECD Headquarters located in Paris.

As a member of ITC initiative, the CIAT participated for the 4th time at the “Core Group Meeting”, where priorities and future actions to develop in the taxation field are discussed with international organizations and representatives of countries from diverse continents.

In this opportunity, the CIAT Cooperation and International Tax Director, the Planning and Institutional Development Director, ATAF representatives, ECLAC, the European Commission, IMF, the Global Forum on Transparency and Information Exchange for Tax Purposes, the ITD, the OECD, the World Bank, KfW, GIZ, the German Ministry for Economic Cooperation, the State Secretariat for Economic Affairs of Switzerland (SECO) and the Ministries of Foreign Affairs of France, the Netherlands, and Spain participated.

Among the most relevant aspects that have been discussed are the report of the “Task Force and Development” meeting on February 7-8 of this year, the ITC cooperation with regional organizations in Africa, Asia and Latin America, the possible ITC cooperation with the “Global Forum on Transparency and Tax Information Exchange”, the OECD support in the development of the “Principles for the international commitment in support of developing countries in tax related issues” and the treatment of the public income originating from natural resources.

During the meeting, the CIAT had the opportunity to comment the results obtained in the ITC cooperation and the advances in the projects that arise from the ITC agreement in October, 2011, which are mainly oriented to the development of topics related to control of operations and financial institutions, control of multinational companies, tax fraud and impact of the agreements to avoid double taxation in direct foreign investment.

The CIAT has also discussed with ITC/ECLAC and the World Bank aspects of common interest related to the regional seminar that will be jointly organized in Santiago, Chile next April 27th, 2012, after the CIAT General Assembly.

The Tax Administrations Inform Brazil - Ambassador of Panama visits the Secretary of the Federal Revenue of Brazil - RFB On January 30th, the Secretary Carlos Alberto Freitas Barreto and the Coordinator General of the International Relations Flávio Antonio Gonçalves Martins Araújo received the visit of the Ambassador of Panama, Gabriela Garcia.

Flávio Antonio Araújo Correspondent

Dominican Republic - Dominic Republic - Latin American Countries wish to replicate the Technological Development of the General Directorate of Internal Taxes The General Director of Internal Taxes, Juan Hernández, met this week with a new international delegation, this time from El Salvador, to coordinate cooperation works in order to replicate the Dominican technological experience in the Tax Administration in several brotherly countries.

The members of the Salvadoran delegation were Mr. Juan Neftalí Murillo Ruiz, General Director of the Treasury; Mr. Ramón A. Pérez, Deputy General Director of Internal Taxes; Mrs. Carmen María Hernández de Mancía, Head of the

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Technical Assistance Division; Mr. Eduardo Alexander Rivera López, National Deputy Director of Administration and Mrs. Lilena Guadalupe Martínez de Soto, Innovation and Portal Management Coordinator.

Source: Web site Nieves Vargas Collado Correspondent

Ecuador -Institute of Fiscal Studies provided technical assistance to Ecuador The Institute of Fiscal Studies (IEF-Spanish acronym) successfully concluded a technical assistance mission to the Internal Revenue Service (SRI-Spanish acronym) of Ecuador. The purpose of the assistance was to inform the officials about the research work carried out by the Institute of Fiscal Studies in microsimulation, as well as to explore such issues as panel and sampling carried out in this field.

The IEF technicians providing the assistance in Quito were César Pérez and Lucía Torrejón. They conducted meetings and workshops with the Internal Revenue Service officials from January 31 through February 2, 2012.

IEF experts and SRI officials from Ecuador who participated in the workshops

The working sessions contributed greatly to guide microsimulation in the analysis of tax policy undertaken by the SRI’s Fiscal Studies Center.

El Salvador - Ministry of the Treasury undertakes dissemination of the Tax Code and Income Tax Law Last January 18, the Ministry of the Treasury conducted a training session for the Salvadoran Industrialists Association (ASI-Spanish acronym), especially intended for financial and administrative managers, which dealt with the Tax Code and Income Tax Law reforms approved last December 14 by the Legislative Assembly.

According to the reform, income tax rates are increased from 25% to 30% on net income, except for annual taxed income lower than or equal to $150,000, which will continue to be taxed at the 25% rate.

Correspondent Ramón Pérez Gómez

Honduras - DEI Trains staff for Providing Taxpayer Assistance in new Agencies Within the framework of the actions anticipated by the Executive Directorate of Revenues (DEI-Spanish acronym) which involve the establishment of 10 Taxpayer Assistance Agencies, training of the staff that will be working in these offices is underway this week.

The training includes administrative, tax and customs regulations. The use of digital technologies is also part of the professional training, given that the institution will be acquiring intelligent equipment for the new offices.

Source: Web site Grace de La Paz Saravia Correspondent

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Honduras - International Organizations, Private Businesses and the Public Sector have joined efforts to speed up Regional Trade The Department of Commerce, the Customs and Border Protection Office and the U.S. Embassy in Honduras have joined efforts with the Executive Directorate of Revenues (DEI), the Secretariat of Industry and Trade (SIC-Spanish acronym) and the American Chamber of Commerce of Honduras and are carrying out a Workshop called: “Developing a Competitive Advantage in the Current Market� in order to ensure adequate planning of foreign trade operations.

The purpose of the workshop is to promote the relationships between private businesses and the Honduran public sector involved in providing customs services, in order to discuss key aspects relative to the administrative customs and border reforms.

Grace de La Paz Saravia Correspondent

Peru - SUNAT will Strengthen Control, Facilitation and Tax Culture Actions with new Organizational Structure To guarantee an efficient execution of the tax policy, it is necessary that the National Superintendency of Tax Administration (SUNAT) count on adequate management mechanisms and instruments, as well as a flexible organic structure that may respond to its strategic role as collection entity.

Thus, the SUNAT Strengthening Law was approved last December for providing tools to the Tax Administration to fight evasion and avoidance, contraband and illegal trafficking of goods, facilitate foreign trade, expand the tax base and improve collection by means of a fair and equitable system for the taxpayers.

Fuente: Sitio Web Clara Urteaga Correspondent

South African Trade Statistics for December 2011 The trade surplus for December 2011 is R4.7 billion (Surplus of 10.3 billion in December 2010) compared to a deficit of R8.0 billion in November 2011, a month-on-month improvement of R12.7 billion. Exports decreased by R5.5 billion (-8.0%) to R63.0 billion and imports decreased by R18.2 billion (-23.8%) to R58.3 billion.

The trade surplus of R4.7 billion in December 2011 was mainly due to a decrease in imports of products of chemical or allied industries, original equipment components, mineral products and machinery and electrical appliances.

Varsha Singh 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 Antonio Uckmar Award 2012

The 2012 Uckmar visiting Research Scholarship in the International Tax Law The institute for Austrian and International Tax Law at WU is one of the world´s leading institute for research and teaching in the field of tax law. Each year we select ouststanding doctoral students and, to a minor extent, postgraduate research fellows from other distinguished universities who wish to visit the institute for periods from one month to the year as visiting research scholars.

The deadline for the application for the Uckmar visiting Research Scholarship in the International tax law is October 15, 2012.

Information Institute for Austrian and International Tax Law (WU) “Job Advertisement”

Together with the OECD, IBFD, Università Cattolica del Sacro Cuore, IFA Canadian Branch and Canadian Tax Foundation the Institute for Austrian and International Tax Law (WU) in Vienna has initiated and conducted a project which made it possible that almost 1.200 historical OEEC and OECD materials concerning the OECD Model Convention from the years 1954 to 1976 had been scanned and re-typed. Currently they are freely available at <www.taxtreatieshistory.org> in a searchable form for all tax experts around the world. All these documents enable researchers and practitioners to take into account historical materials when they try to search for the meaning of today’s tax treaty provisions.

Post of the Month February 13, 2012

Notificaciones Electrónicas: Written by: Raúl Zambrano

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Training Enrolment open for the Specialized Program on Tax Law and Tax Administration The Externado University of Colombia and CIAT within their cooperation agreement are inviting all Tax Administrations officials of the CIAT member countries, as well as the general public, to participate in the Specialized Program on Tax Law and Tax Administration. In order to participate, a registration form must be filled out and send to capacitacion@ciat.org indicating the name of the specialized program and the rest of the requirements. Registration forms will be received until May 4th, 2012....Tax Law and Tax Administration

CIAT Courses registration call Given the importance of offering a permanent training that keeps the tax professionals up to date with the issues of tax administration, customs and transfer pricing, we announced that we have opened the registration for the following courses: • • • •

Course on Control of Institutions and Financial Operations 6ed.

Basic course on Human Resources Course on Tax Ethics and Tax Citizenship 2nd edition.

Course on Transfer Pricing 5th edition.

To participate, please fill the inscription form and send it to capacitación@ciat.org indicating the name of the course with the other requirements.

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

Fiscal Observatory of Latin America and the Caribbean (OFILAC) The Fiscal Observatory of Latin America and the Caribbean (OFILAC) was born as an initiative of the Economic Commission for Latin America and the Caribbean (ECLAC), with financial support from the Spanish Agency for International Cooperation and Development (AECID), to contribute to the improvement of fiscal policy through the dissemination of studies and debate with different actors, joining forces of different organisms participating in this observatory, such as GIZ, AECID, European Commission, IMF, IADB, OECD, CIAT, among others.

OFILAC represents a place for the analysis, discussion and follow-up of fiscal policy in the countries of the region, encouraging the debate of fiscal subjects among employees from international organizations, fiscal authorities and other experts in the subject.

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Other Documents Solving the Impossible Trinity of Consumption Taxes: Personalized VAT

Alberto Barreix, Martín Bès, and Jerónimo Roca September 2011 This document proposes a solution to the Impossible Trinity of the progressiveness of a consumption tax, which require a broad base, a uniform rate and relief for the poorest taxpayers. The proposal consists of the extending the tax base of the Value Added Tax and compensating the poor with a transfer. The authors suggest adopting the instruments used to target and deliver benefits which have been successfully applied for 15 years in the new generation of Latin American social programs, such as the conditioned cash transfers.

This article is a part of a broader body of work which its authors are conducting on tax policies and equity.

This study was presented in the Seminar “Fiscal Reform in Latin America” that took place in Barcelona in October 2011. The seminar was organized by Fundación Centro de Estudios y Documentación Internacionales de Barcelona (CIDOB) in collaboration with with Secretaría General Iberoamericana (SEGIB) and the Economic Commission for Latin America and the Caribbean (ECLAC). This study will be a chapter of a book that will be published on this event.

Revenue Statistics in Latin America

The Organisation for Economic Co-operation and Development (OECD) The Economic Commission for Latin America and the Caribbean (ECLAC) The Inter-American Center of Tax Administrations (CIAT) December 2011 Revenue Statistics in Latin America is a joint publication by the OECD Centre for Tax Policy and Administration, the OECD Development Centre, the United Nations Economic Commission for Latin America and the Caribbean (ECLAC) and the InterAmerican Centre of Tax Administrations (CIAT). It presents detailed, internationally comparable data on tax revenues for 12 Latin American economies, 2 of which are OECD members. Its approach is based on the wellestablished methodology of the OECD Revenue Statistics database (OECD, 2011), which has become an essential reference source for OECD member countries.

The Decade of Latin America and the Caribbean: A Real Opportunity Luis Alberto Moreno President of the Inter-American Development Bank (IDB) 2011

This book takes a unique look at the current economic and social development trends in Latin America and the Caribbean and the region’s challenges for the future. The book’s author, Luis Alberto Moreno, president of the InterAmerican Development Bank (IDB), highlights the region’s strengths and its social gains and institutional reforms.

He also notes that the region still has a long way to go. Despite the present positive outlook, he says, the region faces risks that future events could still see a downturn if public policies are inadequate, if lessons of the past are not considered, and if the obstacles that stand in the way of rapidly achieving equity are not recognized.