Y6n11

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eCIAT ISSN 1684-9833 • Year 6 / No. 11 / June 27, 2014

The Executive Secretariat Informs

The Executive Secretariat Informs The EUROsociAL program II hosts a visit for exchanging strategies and agreements on tax information exchange based on the Argentina-AFIP experience Regional seminar on “Multinational Taxation & Transfer Pricing“

The Tax Administrations Inform Argentina - Argentina and Bolivia carried out a bilateral meeting of customs authorities Brazil - Taxpayers increase their adherence to the m-IRPF Brazil - Federal Revenue opens in Sao Paulo a Laboratory for the fight against money laundering Bolivia - The SIN collected 21.831,1 million until May 2014, including VAT and IT Costa Rica - Minister of finance presents main actions regarding taxation France - The DGFIP use “Data mining” to detect fraud

The EUROsociAL program II hosts a visit for exchanging strategies and agreements on tax information exchange based on the Argentina-AFIP experience From June 17 to 19, 2014 in the city of Buenos Aires was held a “South-South exchange visit “on “strategies and agreements of tax information exchange” mainly based on the experience acquired over the years by the “Federal Administration of Public Revenue (AFIP) “of Argentina.

During the visit, the AFIP staff presented to the tax Auditors of the Receita Federal of Brazil, the administrative structure, vision, strategies and management procedures applied by the Administration in order to implement the wide network of conventions and agreements that enable the exchange of information with more than 60 countries around the world. The tactics applied to better use this network were also presented, including dissemination tasks and training of officials; the wide availability of information in databases as well as its use through crosses, including information received through automatic exchanges of information from other countries (compared with data declared by taxpayers) and the use of public information (detection of offshore companies, non-declared properties, etc.).

This visit is a result of the demands of countries presented to the II EUROsociAL program, within the action framework on “Compliance with tax obligations “, “Public finance”, coordinated by the FIIAPP, whose operating partners are AEAT of Spain, IEF of Spain and CIAT. From now on, along with the EUROsociAL program II members, CIAT will follow the progresses, claims and interests presented by the beneficiary administrations of the program, in order to move forward on new activities in support of voluntary compliance.

Le Datamining à la DGFiP pour détecter la fraude Honduras - international Auditors will control 34 large companies which evade the tax administration Paraguay - Tax revenues increased by 21.8% in may Dominican Republic - DGII achieves a compliance level of 102.5% for the January-May 2014 collection period Training IBFD News Post of the Month Other Documents

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Vistas de la Sesión inaugural de la 48 Asamblea General del CIAT.

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Regional seminar on “Multinational Taxation & Transfer Pricing“ The International Center of Tax Administrations (CIAT) and the German Cooperation (GIZ) in collaboration with the Inland Revenue Department from the Ministry of Finance and Economy of Trinidad & Tobago, carried out a regional seminar on multinational taxation & transfer pricing in Port of Spain from 10 to 12 June. The seminar was inaugurated by the Minister of Finance and Economy of T&T. Also the Vice Ambassador of Germany in T&T and the CIAT Director of International Cooperation and Taxation addressed some words to the participants.

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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.

The seminar was attended by officials from the tax administrations and ministries of finance of Argentina, Barbados, Belize, Bermuda, Dominican Republic, Guyana, Jamaica, Italy, Mexico, Sint Maarten, Trinidad and Tobago, and Uruguay, as well as representatives from the OECD (Global Forum), the International Bureau of Fiscal Documentation (IBFD), CIAT, and GIZ. The objective of this regional meeting was exchanging experiences between tax administrations and ministries of finance from Latin America and the Caribbean Countries, offering Latin American experiences and new developments to the Caribbean on the audit of multinational enterprises (MNE), transfer pricing (TP) and exchange of information (EoI). Furthermore were discussed aspects of tax treaties under the most widespread models, including the most common risk and benefits for the taxation of MNE; and last, BEPS (Base Erosion and Profit Shifting) Project and its Action Plan established by OECD/G-20. On the last day of the seminar, a dialogue on MNE taxation in the Caribbean and T&T took place with tax intermediaries (Ernst & Young and KPMG) and data base producers (RoyaltyStat).

With this activity a series of seminars in the MERCOSUR, Central America, the Andean Region of Latin America and the Caribbean region were closed. CIAT in collaboration with the German Cooperation will keep on working on this topic in the region in the next few years. Technical missions to the region and study tours in different tax matters have been planned due to the demand received from the national tax administrations.

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From left to right: Mr. Nayak Ramdahin, Charmann Board of Inland Revenue; Mr. Ulrich Kinne, Deputy Head of German Embassy; The Honourable Rudranath Indarsingh, Minister in the Ministry of Finance and Economy; Mr. Gonzalo Arias, Director of International Taxation and Cooperation; Mr. Jörg Wisner, Head of German Mission at CIAT, GIZ, German Cooperation.

Ms. Monica Bhatia, Head of Secretariat Global Forum on Transparency and Exchange of Information for Tax Purposes; Ten.Col Stefano Gesuelli, Head of the Italian Mission before CIAT; Mr. Gonzalo Arias, CIAT Director of International Cooperation and Taxation; Mr. Nayak Ramdahin, Charmann Board of Inland Revenue.

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The Tax Administrations Inform Argentina - Argentina and Bolivia carried out a bilateral meeting of customs authorities Authorities of the customs of Bolivia and Argentina met on the border to discuss the implementation of the new customs control systems between the two countries.

During the meeting, officials visited the grounds of Campo Pajoso in Bolivian territory, where the national customs of Bolivia offered to move the control of freight for Bolivian import and Argentine export - and addressed issues such as the progress in the implementation of new control systems.

María Luisa Carbonell Correspondent

Brazil - Taxpayers increase their adherence to the m-IRPF The m-IRPF (electronic submission of PIT return) allows people to submit through mobile devices (tablets and smartphones), connected to the internet, submit at any time and from anywhere their personal income tax return.

The number of personal income tax returns received through m-IRPJ shows the growing acceptance of this application by taxpayers.

Some facts from this year about the m-IRPF: • 20% of Brazilian municipalities had some taxpayer using the m-IRPF. Last year they were less than 14%.

• The most widely used operating system is Android with 53% of the total.

• The professions that most use m-IRPF are from code 410, bankers, economists, secretaries, assistants and administrative assistants, followed by code 130-Manager or supervisor of industrial, commercial or service providers.

• The largest number of returns received through m-IRPF was from the municipality of São Paulo.

• The oldest taxpayer is 97 years old and is from Belo Horizonte-mg.

• 61% of taxpayers are male and 39% are women

Below are the results of m-IRPF in 2014:

Brazil - Federal Revenue opens in Sao Paulo a Laboratory for the fight against money laundering The technological laboratory for the fight against money-laundering, opened its doors on April 25, it is the 24th unit of a network of laboratories established in several States, as a result of cooperation agreements signed between the National Secretariat of Justice (SNJ), the Ministry of Justice and associate institutions, within the framework of the National Strategy to Fight Corruption and Money-Laundering (ENCCLA).

The laboratory installed in the Demac building, is part of the national network of laboratories against money launderingthe Net-LAB of the Ministry of Justice.

Currently there are 24 laboratories of

this kind in Brazil. At the end of the year 2015, 43 units will be operating in the country.

The Net-LAB - Founded in 2006 as an initiative of the National Strategy to Fight Corruption and Money-Laundering -Enccla, is coordinated by the Ministry of Justice. The main objective of this network is the exchange of technologies, methods and experiences in the fight against money laundering and corruption. Installed in the security departments, civil police departments and State Government departments, the laboratories are using technological analysis solutions for large volumes of information. They coordinate the

investigations on money laundering or corruption which involves breaking bank secrecy for many accounts, telephone and fiscal secrecy.

The LAB/LD of the Federal Revenue will have at access to use technology applied for collection, treatment and analysis of the evidence obtained during investigation processes, both in the fight against corruption and money laundry, as well as in the tax and customs fields.

During the ceremony, Carlos Barreto, the Federal Revenue Secretary, stressed that they have been waiting for this for a long time. “Since I was appointed the Federal Revenue Secretary in 2011, this was a priority for us,” he said. For

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him, the results will be fully achieved.

“Without the lab it could not be possible to efficiently and timely deal with such a large amount of data and information”, he assured.

For the National Secretary of Justice, Paulo Abram Pires Júnior, the new lab extends the power and gives a qualitative leap. “So far, we have been trying to identify corruption that has already taken place. Now, we are working to try to prevent more sophisticated type of corruption, “he said.” While it is true that today criminal organizations have used technology to improve their ability for misusing public funds, it is also true that the State must be ahead in the use of these technologies, and that is exactly what we are doing here today by opening this laboratory together with Federal Revenue” he said.

The Coordinator-General for research of the Federal Revenue (Copei), Gerson Dagord Schaan said that the origins of the laboratory date back to 2006, when, through a cooperation agreement, the Federal Revenue met with the criminal investigation division of customs and fiscal authorities of the United Kingdom and envisioned to bring that experience to the Brazilian reality. For him, the difference with the laboratory with the Federal Revenue is the huge databases the entity has. “This gives us the possibility to work other aspects, not only to support research, but also gives us other perspectives. We can work on our bases looking to identify fraud and evidence of money laundering in a proactive manner” he said. In this sense, the laboratory will allow investigations across the country.

The Director of the Recovery of Assets and International Legal Cooperation Department of the Ministry of Justice, Ricardo Andrade Saadi, said that the network of laboratories arose from the difficulty of processing data from breaking the banking secret. According to him, in the past four years, the laboratory network has already identified funds for about $20 billion that have a criminal origin.

Bolivia - The SIN collected 21.831,1 million until May 2014, including VAT and IT In the first five months of the year, the National Tax Service (SIN) collected Bs 21.831,1 million, income that are higher by 6% compared to the similar period of the previous tax year. This period shows that tax revenues in the internal market - not including HDI e IEHD - grew by 8%, highlighting the sustained increase of the value added tax (VAT) of 17% and the 10% increase of the tax on transactions, said its Executive Chairman, Erik Ariñez Bazán.

Juana Patricia Jiménez Soto Correspondent

Costa Rica - Minister of finance presents main actions regarding taxation The Minister of finance, Helio Fallas appeared before the Tax Affairs Committee of the Legislative Assembly. During the hearing, the Minister presented an analysis of the tax panorama of the country, as well as the main actions to be carried out by the Ministry in the coming months to improve the situation of public finances.

These actions are expected to reduce the primary deficit to 1% of GDP in 2015. In 2013 the deficit reached 2.8% of GDP, about 703.583 million colones.

Maribel Zúñiga Cambronero Correspondent

France - The DGFIP use “Data mining” to detect fraud As a priority to face challenge of fighting evasion, the DGFIP established a Consultation Assessment Mission.

the tax has and

This new structure depends on the Tax Inspection Service as well as on the Information Systems Service. Its purpose is to develop a new fraud detection model based on “data mining”.

Its goal is to analyze large volumes of data available in many DGFIP applications: Data from returns, from the tax inspection or inclusive from litigation tracking. This analysis should help to identify fraud profiles.

The mission investigations first priority will be on frauds related to VAT refunds, a very sensitive issue in France since it has an important financial impact.

The DGFiP applications process data are obtained through communication technologies and analyzed by a team of statisticians in order to identify the most relevant fraud characteristics.

The statistics are regularly verified by the Mission’s control expert to refine criteria and precisely identify the signs of fraudulent behaviors. Based on these clues, the files are available to the tax audit network of the DGFiP. So far, the studies have been performed based on a sample. The lessons learned from this experiment will help to extend the intervention area of the mission to other tax environments, so the network will provide data for optimizing the tax audit planning.

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Le Datamining à la DGFiP pour détecter la fraude C’est pour faire face à l’enjeu prioritaire qu’est la lutte contre la fraude fiscale que la DGFiP a mis en place la Mission de Requêtes et de valorisation.

Cette nouvelle structure dépend à la fois du service du contrôle fiscal et du service des systèmes d’information. Son but est d’instaurer un nouveau modèle de détection de la fraude par l’exploration de données, ou « datamining ». L’objectif est ici d’analyser les données de masse disponibles dans de multiples applications de la DGFiP : données déclaratives, issues du contrôle fiscal ou bien encore du suivi des procédures contentieuses,… Cette analyse doit permettre de modéliser des profils de fraude.

La mission a pour première orientation de ses recherches la fraude relative aux remboursements de crédits de TVA, un sujet d’autant plus sensible en France qu’il a un impact financier majeur.

Les données des applications métiers de la DGFiP sont extraites informatiquement pour être analysées par l’équipe de statisticiens dans le but de valoriser les plus pertinentes caractérisant des schémas de fraude. Les statisticiens se rapprochent régulièrement de l’expert en contrôle fiscal de la mission pour affiner les critères et identifier précisément les indices à même de signaler un comportement frauduleux.

En fonction de ces signaux, des dossiers sont proposés pour un contrôle fiscal au réseau de la DGFiP. Pour le moment, les études n’ont porté que sur un échantillon. Ce sont les leçons retenues de cette expérimentation qui permettront d’étendre le domaine d’intervention de la mission à d’autres domaines de la fiscalité, afin qu’elle fournisse son expertise au réseau pour optimiser la programmation du contrôle fiscal.

Honduras - international Auditors will control 34 large companies which evade the tax administration The Director of the Executive Revenue Directorate, (DEI), Miriam Guzmán, confirmed that at the end of this month, international Auditors will come to the country to audit 34 large companies which are certainly evading taxes.

Grace de La Paz Saravia Corresponsal

Paraguay - Tax revenues increased by 21.8% in may In May 2014, the State Undersecretary of taxation (SET) collected about 1.157 billion guaranies, historical record of the last 8 years, which represents 207 billion guaranies more than the total collected by the SET in May 2013.

So far this year (January-may 2014), the SET has collected in total 3 trillion 980 billion guaranies, equivalent to $ 886 million, which is an increase of 24.4%.

Alba Servín Correspondent

Dominican Republic - DGII achieves a compliance level of 102.5% for the January-May 2014 collection period The General Directorate of Internal Taxation (DGII) reported revenues during the first five months of the year, which reached RD$ 141,993.9 billion for an increase of RD$ 21,842.3 billion and a growth of 18.2% compared to the same period of the previous year.

The collection report of the DGII states that the January - May 2014 collection shows a level of compliance of 102.5%.

Nieves Vargas Collado Corresponsal

Training

IBFD News

Post of the Month

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 second half of 2014, please find here the general information for each of the available programs.

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

June 20th, 2014 By: Raul Zambrano Documents and electronic transactions (vi)

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.

From 2014, the SAT has replaced this windshield sticker with another proof of payment. This new method uses the Internet. Through the SAT website and banking agreements for tax payments, taxpayers can enquire and pay the due taxes.

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Other Documents “Incumplimiento Tributario en Impuestos sobre la Renta y Ventas 2010 -2012” Noncompliance on Income Tax and Sales 2010 - 2012 Ministry of Finance of Costa Rica 2014

This paper estimates the noncompliance of sales tax (VAT) and income tax (ISR) for the years 2010 - 2012.

“Estimación del Gasto Tributario (GT) para Costa Rica en el 2011 Impuesto de Ventas, Impuesto de Renta y otros Tributos.”

Estimated Tax Expenditure (GT in Spanish) for Costa Rica in 2011 Sales Tax, Income Tax and other Taxes Department of Finance (DGH) Tax Policy Division (DPF) Ministry of Finance of Costa Rica

This paper is the second report on Tax Expenditure (GT) in Costa Rica and the state of this issue will always be relevant for reasons of transparency, sound public finances and for making decisions on tax policy, especially in periods of low tax collection (available spanish).

“El Gasto Tributario, Metodología y Estimación, Año 2012 Impuesto de Ventas, Impuesto de Renta y otros Tributos” The Tax Expenditure Methodology and estimation, Year 2012 Sales Tax, Income Tax and other Taxes

Department of Finance (DGH) Tax Policy Division (DPF), Ministry of Finance of Costa Rica June 2013 The purpose of this study of Tax Expenditure (GT) in Costa Rica is to present the most relevant methodological aspects and detailed estimate for each of the taxes (available spanish).