Y5n22

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ISSN 1684-9833 • Year 5 / No. 22 / December 20, 2013

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The Executive Secretariat Informs International Tax Dialogue 5th Global Conference held in the Kingdom of Morocco

We invite you to CIATalks, the space provided by CIAT. Read the posts, give your opinion and actively participate

The Executive Secretariat Informs International Tax Dialogue 5th Global Conference held in the Kingdom of Morocco Second workshop on the measurement of Tax Transaction Costs (TTC) in Small and Medium Enterprises (SMEs) The EUROSOCIAL Program has sponsored a course on “Quality management in the Tax Administrations” The Tax Administrations Inform Brazil - Adopts measures to facilitate trade this year Brazil - Sucor begins field testing with the Totem system for taxpayers’ selfservice

During the week of December 2nd the International Tax Dialogue (ITD) held its 5th Global Conference in the City of Marrakech. The theme of this year’s Conference was “Tax and Intergovernmental Relations.”

Senior tax policymakers and administrators from across the world met to discuss how authority to set and collect taxes should be allocated across different levels of national government to ensure accountability, efficiency and economic stability. This is the first time that the revenue aspect of decentralization has taken center stage at a global level to allow countries to debate key questions about who should tax what and share good practices and experiences.

The CIAT organization is an ITD partner and it was represented at by its Executive Secretary, Márcio F. Verdi and Director of Planning and Institutional Development, Socorro Velázquez. There was a significant presence of tax officials from Latin America and the Caribbean.

The closing session was a discussion panel of the week’s events and it was moderated by Pablo Ferreri, Director General of the Uruguay Tax Department. Representatives from ITD partner organizations shared their insights on several aspects of the Conference program and its general discussion. Strong emphasis was made by several partners on the need for continued cooperation and collaboration amongst

Canada - Minister Flaherty Welcomes Royal Assent of the Economic Action Plan 2013 Act, No. 2 Colombia - With the support of the OECD, the World Bank and the European Commission: Continued training in transfer pricing for DIAN auditors Costa Rica - Mexico begin negotiations to avoid double taxation Honduras - President Porfirio Lobo appoints the new director of the DEI Mexico - The evolution of electronic invoicing presented in Brussels IBFD News Training Events Post of the Month New in the web Other Documents of interest

Show in the picture, is the CIAT Executive Secretary, Mr. presentation.

Márcio F. Verdi making his

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international organization that eventually benefits national and subnational tax administrations in the way of improved capacity building.

Kudos was given to the Kingdom of Morocco Ministry of Finance and organizers for a well-planned event.

The complete Conference Press Release is available at this link: Press Release, as are details on the Conference program at the ITD.

Second workshop on the measurement of Tax Transaction Costs (TTC) in Small and Medium Enterprises (SMEs) We invite you to CIATalks, the space provided by CIAT. Read the posts, give your opinion and actively participate

CIAT is a public international organization which groups the tax administrations of 38 countries, (31 Amarican countries, 5 European countries, 1 African countries and 1 Asian country. India is an associate members), 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 Second Workshop on the Measurement of Tax Transaction Costs (TTC) in Small and Medium Enterprises (SMEs) was held in Panama on November 20 and 21, as part of the activities of the CIAT project for Strengthening the Institutional Capacities of National Tax Administrations (NTAs) and the United Nations Department of Economic and Social of the Affairs UN-DESA. ATNs Delegates from 13 Latin American countries and representatives of institutions such as IFC, ECLAC, SYNAPSIS and SEBRAE participated in the event which was a good opportunity to present the results of the measurements carried out in Costa Rica and Uruguay, and to learn about the progress of the measurement being done in Brazil. The workshop also allowed us to identify topics for future researches in the TTC field which may complement the project efforts.

The project mainly aimed strengthening the capacity of the NTAs to analyze, measure, and simplify tax procedures and processes in order to reduce the TTC in SMEs and in the medium term, help strengthen fiscal revenues of the countries in the region. TTC are compliance costs faced by taxpayers to comply with their tax obligations and costs faced by the tax authority to enforce the tax system.

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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

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The implementation of the project was conducted by the CIAT Tax Studies and Research Directorate with the participation of international consultants Byron Vasconez (in charge), Marcel Ramírez and Eduardo Ibarra. It is important to note that this project is an important step for the CIAT Studies Program since it opens the door to a second generation of research: those based on microdata. This strengthens the causal analysis that can be carried out on the tax transaction costs phenomenon. This work is expected to contribute improving the tax administration’s efforts to promote voluntary compliance.

The EUROSOCIAL Program has sponsored a course on “Quality management in the Tax Administrations” On November 18 to 22, the CIAT in partnership with the Spanish Agency for tax administration and the Institute of Fiscal studies of Spain, with the support of the National Tax Service of Bolivia (SIN) and the AECID, carried out a training course on ‘Quality Management in Tax Administrations’.

The purpose of this course was to address quality management based on a conceptual approach, given its dimension in public service field and more specifically, by analyzing its practical application in tax administrations management. This activity was carried out at the AECID offices in Santa Cruz de la From left to right: Mayra Ninoshka Mercado (SIN), Victor Navalpotro Sierra, Bolivia, in presence of officials from the tax Laina (AECID) and Luis Cremades Ugarte (CIAT) authorities of Colombia, Guatemala, Peru, Uruguay and Bolivia, who participated in the different sessions and workshops offered. D. Luis Cremades Ugarte (head of the Spanish Mission in the CIAT), D. Roberto Serrano López and D. Alejandro Luelmo Fernández (inspectors of the service of internal audit at AEAT) were speakers of this course and also participated as instructors.

The topics addressed were not only related to the application of management and quality evaluation models, but also for planning and quality indicators, identification and evaluation of risks, chain of command, tax sociology and new forms of relationship that will improve the corporate social responsibility.

This activity was within the framework of the Eurosocial II program and it responds to issues raised by countries; this is one of the actions planned by the “Voluntary compliance with Tax Obligations” program from the “Public finance” Area, and it allowed the exchange of experiences between countries as well as detecting potential improvements and innovations likely to be applicable in the respective administrations.

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The Tax Administrations Inform Brazil - Adopts measures to facilitate trade this year Regardless of whether or not there is an agreement at the World Trade Organization (WTO) Ministerial Conference, even so the government is giving signs of adopting trade facilitation measures this year, to reduce costs in Brazil.

According to the National Confederation of Industry (CNI), these trade facilitation measures could reduce the costs of exports and imports between 10% and 14%.

In the Brazilian perspective, an agreement at the WTO would be the best option, because besides boosting domestic reforms, this would also foster resources for improvement of customs in developing countries, where Brazil increases its exportations.

According Ernani Checcucci Filho, Undersecretary of Customs and International Relations of the Secretariat of Federal Revenue, the WTO agreement will promote the modernization of the administration, investments in the revision of processes and automation, thereby guaranteeing facilitation as well as greater efficiency in foreign trade transactions control.

The document, in process of negotiation, deals mainly with customs control procedures and techniques, including the subsequent control of cargo, risk management, use of technology, which should lead to greater efficiency and cost reduction.

A source from the Brazilian delegation confirmed that invitations from the Presidential Office for launching the Single Window project will be sent shortly, with some provisions already in force. It will be the only interfase with the Foreign Trade User. It can also be used for other practices, such as simultaneous inspection of goods by the Federal Revenue, ANVISA and other government agencies.

With or without the WTO agreement, the blue line program in Brazil will be improved. Through the blue line system, a company sets voluntary internal control mechanisms to ensure a high level of compliance with customs regulations.

On the other hand, the Federal Revenue recognizes the good performance of the company and chooses to reduce the extensive control of the goods, with the possibility of a subsequent control.

Currently, companies that participate in the blue line program in Brazil account for 40 % of customs declarations in the country. The Federal Revenue wishes to expand the program and simplify the process of admission of companies.

In case of agreement at the WTO, the blue line (also called authorized economic operator), should go beyond customs compliance and take into account the physical safety of the cargo. Companies will need to take a series of measures to ensure that cargo cannot be opened or modified. In return, the unloading or loading of the goods will be much faster.

Mr. Checcuci Filho highlights the progress in information exchange between customs offices, to combat underinvoicing and fraud in commercial transactions. To the extent there are specific cases, the WTO Agreement provides for mandatory mutual information between customs offices. In the future, there will be automatic exchange of information online. (AM)

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Brazil - Sucor begins field testing with the Totem system for taxpayers’ self-service Self-service through the Totem team solution is being designed to improve the services provided to the taxpayer.

The Federal Revenue, through the strategic initiatives of the Sub-Secretariat for Corporate Management (Sucor) and the General Coordination of Information Technologies (Cotec), began midNovember the field testing with the Totem self-service taxpayer system.

The Totem self-service solution is being designed to increase the services provided to the taxpayer. They will be used in different areas of the Federal Revenue to contribute speeding and improve the precision in the service to the citizen. With the totem, taxpayers can complete their returns for travelers (e-DBV) electronically, issue certifications, pay taxes and add documents to the administrative processes, as well as other planned services. For such purposes, the totems have printers, credit and debit cards payment devices, and bar codes reading scanners.

In this first phase of testing, in collaboration with the Coana, the e-DBV application is installed in a Totem located at Guarulhos airport, where around 25,000 passengers of international flights arrive and depart every day.

These initiatives are aligned with the strategic planning of the Federal Revenue, both to “raise the compliance with tax and customs obligations” as well as to “strengthen the image of the institution in the society”, through innovation and actions to reinforce the institution as a leader nationally and internationally.

Canada - Minister Flaherty Welcomes Royal Assent of the Economic Action Plan 2013 Act, No. 2 The Honourable Jim Flaherty, Minister of Finance, welcomed the Royal Assent of Bill C-4, the Economic Action Plan 2013 Act, No. 2.

“With Royal Assent, our Government is poised to implement a number of outstanding measures from Economic Action Plan 2013,” said Minister Flaherty. “Canada continues to see the best job growth in the Group of Seven (G-7), with almost 1.1 million jobs created since July 2009. As we close in on our goal of returning to balanced budgets in 2015, with an expected surplus of $3.7 billion in 2015–16, the Economic Action Plan 2013 Act, No. 2 sets the stage for more job creation, more economic growth and greater prosperity for all Canadians.”

Maria Pica Correspondent

Colombia - With the support of the OECD, the World Bank and the European Commission: Continued training in transfer pricing for DIAN auditors The second year of training in transfer pricing given by the OECD concluded with the participation of 30 DIAN officials. So far there have been six workshops three more will take place in 2014.

The trainings are part of the Task Force on Tax and Development program, coordinated by the OECD, which seeks to support developing countries, providing resources to enhance the tax authorities’ capacity, strengthen the knowledge of the team in charge of investigations, and improve the control skills and techniques, and increase collections.

This project is developed under the bilateral agreement in force between Colombia and the OECD, in partnership with multilateral agencies like the World Bank and the European Commission.

Rubén Darío Pineda Correspondent

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Costa Rica - Mexico begin negotiations to avoid double taxation In order to avoid situations of double taxation between Mexico and Costa Rica, delegates of both governments meet in the country to negotiate the signing of an agreement.

This would be the second agreement of this type that Costa Rica would sign. The first was signed with Spain in 2004 and took effect in 2011. The first round of negotiations between the two nations began Tuesday in San Jose and will last until December 06. If the negotiation could not be completed, a second round in Mexico City would take place in early 2014.

Maribel Zúñiga Cambronero Correspondent

Honduras - President Porfirio Lobo appoints the new director of the DEI The President, Porfirio Lobo Sosa, in presence of the Deputy Minister Evelyn Bautista, appointed the Attorney Miriam Bonilla Estela Guzmán, as new head of the Directorate of Revenue (DEI).

Lic. Guzman is the first officer who is listed in the new administration of the Presidentelect of Honduras, Juan Orlando Hernandez, and will head the Directorate of Revenue (DEI) Miriam Estela Guzman has served as Head of Registration at the National Autonomous University of Honduras (UNAH) then become judge of the Institute for Access to Public Information (IAIP). Due to her competency, she was called to integrate the Public Attorney Intervening Commission. She was also a member of the Presidential Commission to review the exemptions.

Grace de La Paz Saravia Correspondent

Mexico - The evolution of electronic invoicing presented in Brussels The Secretary of Finance and Public Credit through the Tax Administration Service, presented the evolution of Electronic Invoicing in Mexico during a meeting in Brussels, Belgium, with officials from the European Commission and executives of the European E-invoice Service Providers association, EESPA, non-profit association representing providers of electronic invoicing in Europe.

The authorities of the European Commission approved the strength of the Mexican model of Electronic Invoice.

They noted that in the European Union, the Electronic Invoicing model most similar to Mexico’s electronic invoice is the one of Portugal, which recently implemented the scheme authorized by the government for providing services, which has been very successful.

Adrian Guarneros Correspondent

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IBFD News International Bureau of Fiscal Documentation (IBFD) Cooperation- CIAT - IBF

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.

Training As part of our commitment to support the human talent development within the TAs, we have started the registration process for the courses that begin in the first half of 2014, please find here the general information for each of the available programs.

Events Scholarship for a full time course of our LL.M. program in International Tax Law: The Institute for Austrian and International Tax Law of the WU Viena, Austria

In a time of globalization, international tax law has gained in importance. The LL.M. program at WU meets the increasing demands for training and education by offering courses the intensity of which is second to none worldwide. The main emphasis is on conveying specialist knowledge in international tax law, as well as on making an interdisciplinary link to related areas of knowledge.

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Post of the Month 29 November, 2013

Written by: Raúl Zambrano A story of vampires (i) Most probably I never forgot the day I met a vampire. It was daylight, clear and sunny. The vampire, who did not vanish with the light, told Socorro Velázquez and me his wanderings at night. He had a double life.

9 December, 2013

Written by: Raúl Zambrano A story of vampires (ii) An Internet search for the word “Bitcoin” while writing this post resulted in 31 million entries on Google and ten million on bing. The search report showed news articles from newspapers and news sites in many parts of the world. Perhaps.

New in the web Prevention and Control of Tax Evasion CIAT Technical Conference Nairobi, Kenya 2013

This document includes the papers presented at the CIAT Technical Conference, held in Nairobi, Kenya, September 9 to 12, 2013. The main topic is developed around three subtopics “Tax Audits in the Digital Age”, “Presumptive Taxation and third party Information sources”, “Tax Audits: Specialization Programs by sectors”.

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Other Documents of interest Terms of Trade and Fiscal Sustainability when the Sovereign Exploits a Natural Resource Oviedo, Marcelo P.; Andrian, Leandro Inter-American Development Bank Working Paper 2013

When it comes to assess the sustainability of fiscal policy and public debt in Andean countries, two idiosyncratic facts of fiscal revenues have to be considered. First, fiscal revenues coming from natural resources represent up to 44% of total fiscal revenues, producing a strong correlation between terms of trade and the overall fiscal balance, ranging from 0.79 in Ecuador to 0.90 in Peru.

New Econometric Estimates of Long-term Growth Effects of Different Areas of Public Spending Omar Barbiero, Boris Cournède December, 2013

Using panel data for OECD countries, this study investigates the extent to which changes in government spending on education, health and other areas influence long-term growth. The results suggest that, if total government spending is kept unchanged, increasing expenditure on health, education and transport raises long-term GDP growth.