Y6n14

Newsletter

eCIAT ISSN 1684-9833 • Year 6 / No. 14 / August 15, 2014

The Executive Secretariat Informs The Executive Secretariat Informs CIAT mission provides the General Directorate of Taxation of Costa Rica specialized HR counseling within the framework of the EUROsociAL II Program XIII International Taxation Seminar in Cuba: “The impact of information technologies and telecommunications on Tax Administration Moderniz*ation” New edition of the Tax Administration Review CIAT/AEAT/IEF Consultation Panel with Tax Administrations of Caribbean Countries Regarding Base Erosion and Profit Shifting (BEPS) The Tax Administrations Inform Argentina - Echegaray closed the VII International Customs Duty Congress Organized by the Argentine Fiscal Studies Association Honduras - and Ecuador sign Mutual Cooperation and Assistance and Information Exchange between Tax Administrations Agreement Mexico – Electronic accounting to be implemented in January 2015 Paraguay – Taxation begins examination of companies involved in mega evasion

CIAT mission provides the General Directorate of Taxation of Costa Rica specialized HR counseling within the framework of the EUROsociAL II Program Since 2013 the Eurosocial II Program, together with CIAT, have been assisting the Ministry of Finance of Costa Rica in its Project for the strengthening of human talent, with the General Directorate of Taxation (DGT) being the pilot area. The project involves the reconsideration of several human resources management processes, with a view to achieving their optimization, strengthening, modernization, efficiency and greater effectiveness. To this end, the experts, María Raquel Ayala, CIAT Director of Training and Human Talent Development and Isabelle Gaëtan, Official from the General Directorate of Finances and Public Revenues of France and Head of the French Mission at CIAT visited the DGT on July 21 to 25, 2014. On this occasion, they supervised and provided technical followup to the implementation of the instruments designed during a counseling session held in 2013, within the framework of Eurosocial II, for improving the DGT’s recruitment, selection, training, evaluation, promotion and administrative career processes.

During said counseling week, the Administrative and Financial Directorate appointed the group of officials who will be in charge of amending the already developed jobs manual, as well as those officials who will be responsible for preparing and reviewing the performance indicators. Likewise, contact was established with officials from the Finance Research and Training Center, who will prepare the development and training curricula for the different processes dealing with the entry and updating of the officials.

Dominican Republic - DGII launches automated service for issuing Certificate of Compliance with Fiscal Obligations Dominican Republic – Internal Taxes and Viva Wyndham sign first advance pricing arrangement -APA Training IBFD News New in the Web From left to right: Mr. Carlos Vargas Durán, General Director of Taxation; the two advisers, Ms. Isabelle Gaëtan and Ms. Ma.Raquel Ayala; Mr. Fernando Rodríguez Garro, Deputy Minister of Revenues, , Ministry of Finance; Mr. Wilberth Cordero Fernández, Head of Human Resources, Ministry of Finance; Mr. José Luis Martínez Prada, Chargé d’Affaires of the Delegation of the European Union to Costa Rica and Panama and Ms. Maribel Zúñiga, DGT’s Director of Interinstitutional Tax Relations.

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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.

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The DGT’s pilot experience is intended to be replicated in other entities of the Ministry of Finance and of the Central Government of Costa Rica.

The specialized counseling resulted from the request submitted by Costa Rica to the EUROsociAL II Program, within the framework of the “Compliance with Tax Obligations” Action of the “Public Finances” Area, which is coordinated by FIIAPP and whose operational partners are the AEAT of Spain, IEF of Spain and CIAT. Hereinafter, together with the partners of the EUROsociAL II Program, CIAT will follow up the progress, needs and interests resulting from this counseling, with a view to advancing on new activities for supporting voluntary compliance.

Mr. José Luis Martínez Prada, Chargé d´Affaires of the European Union in Costa Rica and Maribel Zúñiga, Director of Interinstitutional Tax Relations of the DGT.

The of Head of Human Resources of the Ministry of Finance and the advisers.

XIII International Taxation Seminar in Cuba: “The impact of information technologies and telecommunications on Tax Administration Modernization” Last August 6-8, under the auspices of the Tax Administration National Office (ONAT) of Cuba and the collaboration of CIAT, the 13th Tax International Seminar was held in La Havanna, Cuba. The main topic was “the impact of information technologies and telecommunications - ICTs - in the modernization of the tax administration”.

High-level representatives from the tax administrations of Argentina, Brazil, Bolivia, Chile, Ecuador, Spain, France, Guatemala, Mexico, Nicaragua, Paraguay, and Peru have participated to the seminar; as well as the tax administration of the city of Buenos Aires, the Argentine Judicial Branch and the International Cooperation Agency of the German Government (GIZ). Among the authorities attending, we had the pleasure to find Mr Carlos Alberto Barreto, Secretary of Receita Federal of Brazil and President of the CIAT Executive Council, and Mr. Santiago Menéndez Menéndez, Director General of the State Agency for Tax Administration of Spain. As representative of the Cuban government, Mrs. Lina Pedraza Rodríguez, Minister of Finance and Prices of Cuba; Mrs. Meisi Bolaños Weiss, Deputy Minister of Finance and Prices; and Ms. Yolanda Álvarez de la Torre, Head of the ONAT, as well as other authorities of the Ministry of Finance and Prices, ONAT and various public agencies have participated.

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Through this activity, it has been possible to know in detail the latest measures taken by the Government of Cuba, including those related to the tax and economic policy as well as the main actions taken by the ONAT to implement these changes. In this regard, it has been impressive to learn about the progress made in the special zone development of Mariel, and the perspectives generated by this project.

They have also shared and discussed valuable experiences of the countries present, related to the application of ICT in the management of tax documents and information regimes, services to the taxpayer, collection, control and enforced collection.

While the central theme of the event refers to the TICs, the introduction of two complementary topics on the last day of the seminar has allowed, on the one hand, to approach the topic of “legal Services” related to tax breaches and their sanctions, and the structure, functions and peculiarities of the tax administrations legal services of the tax administrations under the theme “Legal services”. On the other hand, the subject presented by the ONAT “results of evasion packages studies “ has allowed to know approaches adopted by this institution to estimate the approximate level of evasion and consequently to adopt effective actions to improve tax compliance.

New edition of the Tax Administration Review CIAT/AEAT/IEF The 37th edition of the Tax Administration Review CIAT/AEAT/IEF is now available to all MyCiat community members.

As in previous issues, our intention is to present to the readers, a diversity of topics covering matters of interest and current importance for our Tax Administrations.

Thus, along this line, one of the topics deals with the conflict between public interest in the collection task and the fundamental right to guarantee privacy in the electronic administration world.

There are specific countries that have endeavored to organize their integrated Administrations and in this sense, one very interesting example is the Argentine solution,

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whereby the administration of the Social Security resources has been entrusted to the Federal Administration of Public Revenues (AFIP).

In the area of tax figures, a paper from Peru integrally analyzes the Labor Income Tax reform, considering different reform options and proposing recommendations for their implementation. Likewise, from the Peruvian perspective and in this case in relation to Value Added and Corporate Income Taxes, the strategy for controlling these taxes in construction companies is systematically presented.

Also, as in previous issues we entered the world of international taxation; in this case, in accordance with BEPS (OECD) to analyze the transfer pricing problems in the Latin American region.

The last article compares the fiscal consolidation system with the optional system for corporate groups, which implies a challenge from the standpoint of the normative development of these systems as well as the organizational development which they demand from our Tax Administrations.

The review is free to download from the CIAT website.

Márcio F. Verdi Executive Secretary

Consultation Panel with Tax Administrations of Caribbean Countries Regarding Base Erosion and Profit Shifting (BEPS) Summary of Discussions by the Co-organizers of the Panel A two-hour panel on BEPS was held on June 11, 2014, within the framework of the eighth CIAT-GIZ Regional Seminar on “Large Businesses and Transfer Pricing” held in Port of Spain, Trinidad and Tobago. It was led by Messrs. Stefano Gesuelli (Guardia di Finanza of Italy), Monica Bhatia (OECD – Global Forum on Transparency and Information Exchange), Gonzalo Arias (CIAT) and Nayak Ramdahin (Inland Revenue Department – Trinidad and Tobago).

The panel is the result of the CIAT Executive Secretary, Mr. Marcio F. Verdi’s commitment acquired at the first meeting on “Regional consultation on BEPS for Latin America and the Caribbean”, of allowing for regional dialogues that may facilitate and guide the work in relation to this subject matter; of the German Cooperation – GIZ’s commitment to support this initiative and the support afforded by the OECD. The discussion panel was mainly focused on the experience of the CIAT member countries of the Caribbean and Belize. In addition, officials from Latin American tax administrations and ministries of finance (Argentina, Mexico, Dominican Republic and Uruguay) as well as the International Bureau of Fiscal Documentation (IBFD) actively participated as experts in the areas of transfer pricing, tax treaties and tax information exchange.

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The Tax Administrations Inform

Echegaray closed the VII International Customs Duty Congress Organized by the Argentine Fiscal Studies Association AFIP’s Director, Mr. Ricardo Echegaray, closed the VII International Customs Duty Congress organized by the Argentine Fiscal Studies Association (AAEF). The federal administrator referred to the advanced information work allowed by the Advanced Sworn Information Returns (ASIR) and inactivations of the Single Tax Identification Code (STIC) for foreign trade operators.

The AAEF president, Miguel Tesón was present, as well as Dr. Catalina García Vizcaíno, who also coordinated a round table on “The WCO and its influence in legislation, doctrine and administrative practice”.

María Luisa Carbonell Correspondent

Honduras - and Ecuador sign Mutual Cooperation and Assistance and Information Exchange between Tax Administrations Agreement As follow-up to the working visit by President Juan Orlando Hernández to Ecuador last March 13, the Executive Directorate of Revenues of Honduras and the Internal Revenue Service of Ecuador signed last July 31 the Mutual Cooperation and Assistance and Information Exchange between Tax Administrations Agreement.

Attorney Miriam Estela Guzmán, Minister of the Executive Directorate of Revenues of Honduras and Economist Ximena Amoroso, Director General of the Internal Revenue Service of Ecuador signed the Agreement. Its purpose is to provide mutual cooperation and administrative assistance, as well as to exchange information in all its modalities, including general information areas of economic activity, simultaneous examinations, as well as examinations abroad, in order to prevent and combat within their respective jurisdictions tax fraud, evasion and avoidance, as well as to establish better sources of tax information.

Grace de La Paz Saravia Correspondent

Mexico – Electronic accounting to be implemented in January 2015 SAT reported that it will not be until January 2015 when companies will begin the electronic filing of their accounting information.

Aristóteles Núñez Sánchez, Head of the Tax Administration Service, explained that this scheme facilitates the sending of accounting information to SAT, thereby anticipating possible examinations by the authority and guaranteeing a single accounting record from the taxpayers which is electronically reported on a monthly basis.

Adrian Guarneros Correspondent

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Paraguay – Taxation begins examination of companies involved in mega evasion The State Undersecretariat of Taxation is working jointly with the Prosecutor’s Office in investigating tax evasion with false invoices. Within this framework, the Tax Administration is examining, by lots, the taxpayers involved in this case.

SET officials identify or analyze the information on each taxpayer, to then link or crosscheck said information with the reports based on documents seized by the Prosecutor’s Office in the different searches carried out at the beginning of the investigation.

Alba Servín Correspondent

Dominican Republic - DGII launches automated service for issuing Certificate of Compliance with Fiscal Obligations The General Directorate of Internal Taxes announced that the service for issuing the “Certificate of Compliance with Tax Obligations” is already available at the Virtual Office, with immediate delivery, 24 hours a day, 7 days a week.

This service is also expressly available at the local Administrations of Santo Domingo and the National District.

Nieves Vargas Collado Correspondent

Dominican Republic – Internal Taxes and Viva Wyndham sign first advance pricing arrangement - APAA The General Directorate of Internal Taxes (DGII) and the Viva Wyndham Resort hotel chain signed the first Advance Pricing Arrangement (APA) to determine the income from hotel operations and taxes to be paid to the Treasury.

The arrangement was signed by Guarocuya Félix, General Director of Internal Taxes and Rafael E. Blanco Canto, Vice-President of Promotora Dominicana del Caribe, company which operates the Viva Wyndham Dominicus Beach and Viva Wyndham Dominicus Palace hotels.

Nieves Vargas Collado Correspondent

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

BFD 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.

New in the Web Bibliographic News July 2014 This section offers for your reference the latest documents from CIAT and other publishers during July, including Journal articles and other regular publications, research papers and studies.