of the Global Tax 50 is available.
This is the first year International Tax Review has
put together a top 50 biggest influences in tax. It celebrates
the individuals that are determined to shape the industry's big
Tax and tax law is in a constant state of change. Taxpayers
have found their work being placed higher on board agendas
while tax officials and governments are using tax as a tool to
slash growing budget deficits.
And with global multinational operating in every country of
the world, a tax change in one location will have implications
the other side of the world. International tax is truly
borderless and the decisions of a few will shape the future for
These changes are influenced by many individuals but
politicians and senior officials are often seen as the figure
heads for change. This is the case, but just as important are
the people that are on a mission to challenge the rules put
upon them. These are academics, in-house directors, pressure
group, activists all not content to sit back and let the future
of tax be dictated without them.
The 50 people and organisations chosen as the biggest
influences on tax today are personal choices. We used no
criteria to make them, apart from importance and impact on the
practice of tax. To make the task easier, we excluded private
practitioners because we felt it would be too difficult to
assess why one lawyer, accountant or adviser was more important
So here are the 50 in alphabetical order. It is up to you to
agree or disagree. Please let us know if we have got the list
right or wrong. We will repeat the list annually, so your
opinion might influence us for next time.
Graham Aaronson QC is chairing a study group that will look
at the feasibility of introducing a general anti-avoidance rule
in the UK.
International Tax Review: What do you consider to
be your biggest achievement or influence on taxation?
Graham Aaronson: Firstly, the
Hoechst/Metalgesellschaft case in the ECJ. I initiated
the Hoechst case, settling the writ in 1995, and took it
through to the ECJ, where, by some bizarre clerical mistake my
name was missed from the record! The ramifications of Hoechst
are still being felt in 2011, with the FII case going to the
Supreme Court next February, and other EU-based GLO challenges
still waiting to begin. The recent M&S decision of the
Court of Appeal is yet another offshoot from Hoechst.
Secondly, getting the courts to apply purposive
interpretation to tax statutes. I initiated this with the
Chevron case in 1995, reinforced it in the Prudential v
Bibby case in 2000, and cemented it in the House of Lords
in BMBF v Mawson in 2000. It seems odd now to think
that pre-Chevron – and indeed in Chevron at the
Special Commissioners – the courts were continuing to
apply the literal language.
ITR: What do you consider to be the most
satisfying dispute you have been involved in, or otherwise
GA: One is BMBF v Mawson, where I
persuaded the House of Lords to issue a single judgement
explaining simply how tax statutes should be interpreted and
applied, particularly in cases where the Revenue regarded the
transaction as tax avoidance. It was, and still is, a pivotal
decision, and one which I never had any doubt that we would win
in the end.
Another satisfying dispute was the extremely long and drawn
out transfer pricing dispute between AstraZeneca and HMRC,
which was settled last year shortly before the hearing
scheduled for 14 weeks.
The settlement was regarded as very beneficial both to
AstraZeneca and to HMRC – an achievement in itself.
But what was particularly satisfying and interesting was the
process of selecting and interviewing the five expert witnesses
– all from Harvard, MIT and other universities in
Boston – and likewise for witness evidence from more
than a dozen people involved in the development of various
drugs. Work on the case, with a huge team from Freshfields,
Deloitte and AstraZeneca, took over four years, and there can
be absolutely no doubt that the excellent settlement was the
product of all that work.
I doubt whether there has ever been any other tax case
involving even a small proportion of the work which the
AstraZeneca dispute entailed; and, equally important, no other
case I have worked on has involved such astonishingly close and
ITR: What were your main undertakings in the role
of chairman of the Tax Law Review Committee?
GA: As chairman of the TLRC, my main
achievement was to initiate the discussion on the form of our
tax legislation, and recommend that it should be completely
rewritten. Whether I am now happy to have initiated the rewrite
programme is something I still wonder about! Another thing I
managed to do was to get a unanimous report on the thorniest of
tax topics – tax avoidance. Considering that the TLRC
then included Lord Templeman, Lord Nolan and representatives of
the tax and accounting professions, that was no easy task.
Krister Andersson is the head of the tax policy department
at BusinessEurope, which represents 20 million companies in 35
countries. He is also the vice chairman with responsibility for
taxation in the Business and Industry Advisory Committee (BIAC)
to the OECD. Andersson is active in debating double taxation in
Europe and beyond and was involved in the EU Brazil Summit,
which aims to streamline business and investment between the
two economies. Andersson's mantra is splitting the tax cake,
ensuring business only pays tax once and he says that transfer
pricing is the biggest problem for business in this area. As a
business representative he has the influence and the ears of
some of the most powerful economic organisations in the world,
not least the OECD and is position to influence tax and
transfer pricing policy, in-line with taxpayers' needs.
Joseph Andrus is the new head of the OECD's transfer
pricing unit. Responsible for steering the Working Party No 6
and other transfer pricing projects for the OECD, Andrus's
influence in the next couple of years will be felt across the
world as taxpayers and revenue agencies attempt to adapt
towards new guidance issued by the OECD.
Joseph Andrus has negotiated high profile transfer pricing
cases for some of the biggest companies in the world but he was
no match for French immigration, arriving one week late to his
Andrus was scheduled to begin his work at the OECD on
October 3 but, because of issues with his visa, he was delayed
by a week. In spite of his late arrival, he has dived straight
into the demands of two projects; intangibles and
administrative aspects. He is also very concerned with the
issue of transfer pricing in developing countries. With an
initial contract of two years, Andrus has his work cut out.
The intangibles project is a big task and, while Andrus is
only in his first week, he has the benefit of having been
involved with the project from the beginning. He has been a
consultant at the OECD, in the field of transfer pricing, for a
number of years, having observed the previous project on the
transfer pricing aspects of business restructurings.
"Previously, I helped write internal papers and gave my
views on various issues. I'm now responsible for moving
transfer pricing forwards, making sure Working Party No 6 (WP6)
has lots to do and focuses on the right things. It's a much
His final job
Andrus joins the OECD from the Boston office of PwC, where
he specialised in the taxation of international transactions
and investments and in the resolution of international tax
disputes. He also has significant experience with competent
authority, APA, IRS appeals and audit matters.
Andrus has resolved competent authority and APA matters in
almost every industry and he has experience in APA negotiation
involving the transfer of intangible property, global dealing
in financial instruments, the sale of tangible products,
R&D cost sharing agreements, and the provision of
intercompany services. He has represented clients in bilateral
dealings with the UK, Japan, France, Germany, Mexico, Korea and
other countries. "This is the last job I will do. I don't
expect to go back to advisory work."
When Caroline Silberztein, Andrus's predecessor, left the
OECD, she told International Tax Review that the
intangibles project would not be negatively affected by her
departure. Tax practitioners, off the record, have said,
however, that they cannot see how this would be true. The
intangibles project deadline is already quite ambitious and,
with Silberztein's departure, it is bound to be delayed.
"I think the intention is to meet the deadlines," says
Andrus. "I think that's one of the reasons the organisation
thought I would be good [for the job] because I have been very
involved with the intangibles project. I know where they're up
to and I have been in the meetings so I'm optimistic that we
will meet the deadlines."
The next meeting for WP6 will be November 6 to 9 and the
Working Party aims to address the comments on the scope of the
project, sent in by business.
"I think we need to do something with those issues. There
are a number of very good suggestions and we will address the
comments in the transfer pricing guidelines that already exist
on safe harbours – those are a bit negative in tone
– and the WP6 has on its agenda some reconsideration
of what is referenced and how it [translates] in practice.
There are times when safe harbours are a good idea and times
when maybe they are not."
Enough on his plate
Andrus says he doesn't have his own agenda at the OECD, the
tasks on his plate are already enough for him to tackle and,
while he says he would be happy to stay on longer than the
agreed two years, it could not be much longer because he is
"The developing countries are also a high-profile issue and
hopefully we can help with that by interacting with other
organisations, work on our out-reach programme and work on our
meetings as part of the international treaty and transfer
pricing global forum, beginning next spring. I will assist in
as much of that as I can."
On his aims throughout his two-year tenure, Andrus says he
wants to help build up the OECD's transfer pricing staff that
will carry on the transfer pricing agenda after he leaves.
"I think there's some need to improve on how we deliver
out-reach and support to governments and to get more people
publically involved. I'm excited about staff building and
getting the right people in place."
If the WP6 doesn't deliver on time, Andrus's aims of
building up the transfer pricing unit could be crucial to the
development of the intangibles project. When the OECD are still
looking to replace Mary Bennett, the previous head of the Tax
Treaty, Transfer Pricing & Financial Transactions Division
in the Centre for Tax Policy and Administration, let's hope
Andrus's late arrival isn't an omen for things to come.
Japan finance minister
Japan's new finance minister, Jun Azumi, does not have an
easy job. After being thrust into this position back in
September he has hit the ground running. His first order of
business was announcing his plans to cut the corporate tax rate
amid fears that the rising value of the yen will encourage
struggling business to relocate overseas. Japan's 41% is one of
the highest in the world. This would be a popular move with
business but would do little to generate extra revenue for a
country still recovering from March's earthquake and
Over the past two years, the value of the yen has increased
by nearly 20% against the dollar, and manufacturers are
struggling to compete on world markets.
Azumi said that he wanted to reduce the rate of corporation
tax to ensure that businesses stayed in Japan.
"Amid global competition, Japan's corporate tax is very
high," said Azumi, who represents the left-leading Democratic
The government initially announced its intention to cut
corporate taxes by five percentage points last December.
However, these plans were put on hold in March after damage
from the earthquake generated new spending commitments, and led
to a further deterioration in the government's financial
Azumi has said that he may need to raise the rate of
corporate tax in the immediate term to finance further
reconstruction, before reducing it below its current rate in
Philip Baker is a barrister and QC practising from Grays Inn
Tax Chambers in London. He specialises in international tax
issues with an emphasis on double tax conventions and EU law
and taxation with a particular emphasis on European Convention
on Human Rights and taxation.
Achievements in recent months include:
- Acting as expert witness in Vodafone case in Mumbai and
- Litigation on EU law and on tax treaty claims;
- Representing the Mauritius government in appeals before
the Privy Council;
- Advising on international tax disputes in Australia,
India, Africa, the US and Romania;
- Advising on international tax issues for multinationals
and for individuals; and
- Pro bono work for Low Income Tax Reform Group
"I hope international taxation is heading towards more
clarity and less conflict, but I fear that we are heading for a
period of competing claims to tax by states, and less of a
leadership role by the OECD, without the UN yet taking on that
role," Baker said.
Finance minister, France
Previously a government spokesman and budget minister, the
French Minister of Finance had big shoes to fill when he
replaced Christine Lagarde following her appointment as
managing director of the International Monetary Fund (IMF) in
July, but this has not held him back.
Along with German Finance Minister Wolfgang Schauble, Baroin
has led the field in the drive for a financial transactions tax
(FTT), calling for the EU to "lead the global mobilisation on
"Nobody can say that a tax on financial transactions is not
technically feasible," added Baroin, as the G20 assesses the
technical coherence of such a move.
He has also implemented significant tax reform measures in
France's 2012 budget aimed at reducing the nation's deficit.
Following comments from French Prime Minsiter, Francois Fillon,
that "our country cannot live beyond its means forever; we have
passed the threshold of tolerance on debt," Baroin started
looking at how tax reform could aid this process.
The extent of his efforts can be seen when you consider the
fact that of the recent austerity budget of €11 billion
(€15 billion), the tax measures amount to €10
billion. The main changes include the repeal of many tax
breaks, and an extension of the participation exemption to
cover capital gains on participation shares. It was previously
applicable only to dividends. This measure constitutes a
compromise in that the participation exemption regime is
heavily criticised in France because of its supposed cost, and
highlights Baroin's pragmatism.
In line with efforts to increase harmonisation of the
corporate tax systems around Europe from French President
Nicolas Sarkozy and German Chancellor Angela Merkel, Baroin has
also promoted Franco-German harmonisation by, for instance,
adopting the German rules on loss carry forward.
Chief judge, US Tax Court
John Colvin is in his second successive term as Chief Judge
of the US Tax Court. Appointed as a judge in 1988 by Ronald
Reagan, he was re-elected by President Bush in 2004 and made
Chief Judge in 2006.
In his role, he is responsible for comprehensively reviewing
every decision made in the Tax Court. This is not a practice
used by all court systems, but the purpose of this review
process, Colvin told International Tax Review, is to
He also oversaw the decision from judges to apportion their
time between the different courts as opposed to each court
developing separately under different tax court judges. But the
lateral thinking applied by Colvin to his Chief Judge role does
not stop there. Colvin has the right, in exceptional
circumstances, to order a court conference whereby a decision
is reviewed by all the sitting judges. This, he explained, is
of particular use when a decision would overturn an existing
IRS regulation, or when the court elects to not follow a
previous tax court opinion.
Before his appointment to the court, Colvin had served as
chief counsel to the Senate Finance Committee, so he has gained
experience of handling matters of taxation from a number of
Colvin maintains a good relationship with lawyers and
advises them to concentrate on stipulations (facts agreed by
both parties) before a trial starts so as to make the trial
process as simple as possible.
Other courts could learn a lot about promoting early
resolution of cases by seeing how Colvin manages his resources.
As the debate surrounding reform of the US tax code rages on,
Colvin is sure to be kept busy, particularly given that filings
topped 90,000 in 2008, 2009 and 2010.
Chairman, Board of Directors, Tax Council Policy
Compared to other representative organisations, the Tax
Council Policy Institute (TCPI) is only a youngster. Founded in
1997, its work is aimed at explaining the impact of tax
policies on the US economy and business and it has already had
considerable success. It is made up of 'senior level tax
professionals who work together to promote sound federal tax
policies and a better understanding of our [the US] federal tax
system'. The TCPI's influence is seen annually in the tax
symposium it convenes in Washington, DC. The conference hosts
speakers from government, corporations and private practice in
high-level discussions that highlight US and global tax
The Institute's president now is Douglas Bates, vice
president, federal relations, Northwestern Mutual, a life
insurance company headquartered in Milwaukee. Though he is not
a tax specialist, he has been around tax politics and policy
for a long time.
"The Annual TCPI Symposium is a unique programme," says
Bates. "It is entirely financed by TCPI members, the topics and
content are developed by the tax directors themselves, they
provide the analysis and populate the panels, and together they
seek a consensus and conclusion. My role is simply to lead the
process with the other members of the board of directors. The
TCPI programs have built a reputation as a balanced, informed
forum of tax policy ideas. That credibility means policymakers
Other well-known names in global commerce have their tax
directors on the TCPI board, including Caterpillar, Johnson
& Johnson and Exxon Mobil.
Chairman of Economic and Financial Affairs
Committee, European Parliament
Sharon Bowles became the first Briton to chair the Economic
and Financial Affairs Committee, commonly known as ECON, of the
European Parliament in 2009. A member of the committee since
becoming an MEP in 2005, she speaks publicly on all the key
issues of tax policy affecting the EU. Other topics that ECON
covers are the regulation of the financial sector, the free
movement of capital and payments, competition rules and the
functioning of the Euro, so the European Commission and the
member states need to take account of the views of Bowles and
While the difficult economic situation in the Eurozone has
dominated ECON's agenda this year, Bowles has also spoken out
about tax issues. In February, she called on member states to
promote tax transparency as a way of tackling corruption in
developing countries and followed this up in May with a letter
to the European Commission asking it to devote resources
towards the issues of country-by-country reporting. The letter
spoke of concerns that multinational companies were not
transparent about the taxes and wages they pay in developing
With issues such as a common consolidated corporate tax
base, financial transactions tax and reform of the VAT system
on the agenda for European lawmakers, Bowles will have a
leading influence in tax decision-making at least until the
next European elections in 2014.
As a former employee of Swiss bank Julius Baer, Rudolf Elmer
shot into the limelight as a whistleblower in 2008. He shared
secret documents with WikiLeaks on the tax evasion activities
of Julius Baer in the Cayman Islands.
Despite this happening three years ago, the influence of
this one act is still being felt across the world and has
shaped the way governments are formulating tax policy.
Elmer was arrested in January for handing over a CD with
2,000 names of tax evaders to Julian Assange, the editor of
WikiLeaks. With this arrest, Elmer had inadvertently changed
the way Switzerland shares tax information with the rest of the
world and potentially marks the end for taxpayers squirreling
money away in secret Swiss bank accounts.
Since then Switzerland has signed a number of agreements
that have shown the intent from the government that it is keen
to shrug off its famous veil of secrecy. However, most of these
deals have revolved around foreign nationals repatriating
assets held in Swiss bank accounts while avoiding hefty fines
One such agreement was of that signed with the UK in August.
Deals are also being negotiated with other countries including
Highlights of the deal include: British citizens with Swiss
accounts will pay the price for tax evasion. Depending on how
long they have held their money in Switzerland, 19% to 34% of
their funds will be taken by HM Revenue & Customs to settle
past liabilities. Switzerland has agreed to an initial upfront
payment of SFr500 million (£384 million) to the UK as a
gesture of good faith. From 2013, a new withholding tax of 48%
on investment income and 27% on gains will apply to UK
residents with Swiss accounts. Until now these accounts have
seen little to no taxation, but suddenly Switzerland is a much
less attractive place for British people seeking to dodge their
fair share of taxes.
Senior public prosecutor, Okokrim, Norway
Morten Eriksen is a senior public prosecutor for Okokrim
– the Norweigan National Authority for Investigation
and Prosecution of Economic and Environmental Crime, and his
prosecuting role in Norway's biggest ever tax scandal has
ensured his influence on tax will continue to be
Transocean, the world's largest offshore drilling company,
was accused of dodging tax liabilities on revenue to the tune
of NKr10 billion ($1.8 billion). In 1999, the company changed
the registration of its residency to the Cayman Islands. In
2009, it again relocated, this time to Switzerland, and shifted
assets between subsidiaries regularly in the intervening
Eriksen argued that Transocean's plan to concentrate
ownership of its Norwegian rigs in companies registered in the
Cayman Islands, was motivated purely by tax objectives. The
case looked at one rig in particular – Polar Pioneer
– which was towed outside of Norwegian territorial
waters for around eight hours in May 1999 and sold to
Transocean International Drilling. By moving out of Norwegian
waters, the country's tax jurisdiction no longer applied and
the sale thus dodged the tax owed.
This is not uncommon, and ships are often sold outside of
harbour, but Transocean's assets had been located in Norway for
a considerable amount of time, and Eriksen argued it was
unlikely that the deal was arranged and concluded during that
eight hour window.
Transocean rejects Okokrim's claims, and further accusations
that two tax advisers – Einar Brask and Klaus Klausen
of Ernst & Young – allegedly helped them to
provide incorrect or incomplete information regarding tax
liabilities and payments, and its intention to clear its name
in court will result in Norway's biggest ever tax evasion case.
Companies will be keeping a close watch as some of the issues
of contention are widely applicable, especially for those in
the sector, so confirmation of a negative ruling against
Transocean could mean fundamental changes to the structuring of
acquisitions from a tax point of view.
Chairman, Policy and Resources Committee, City of
London Corporation, UK
Sticking up for the UK financial services industry must feel
like going into combat in full armour. Banks and other
financial institutions have faced unrelenting criticism from
the public and parts of the media since 2008 for their role in
creating global economic turmoil while their top executives
enjoyed multi-million pound salaries and benefits.
At the same time, the industry has its own goals for how it
wants to develop and what it needs to do that, not least a
competitive tax policy.
The person who has turned up regularly to deal with the
criticism and to promote the industry's objectives has been
Stuart Fraser, who chairs the Policy and Resources Committee of
the City of London Corporation, the organisation which runs the
area of the city that is the centre of financial services in
"We work with the political parties on many issues," says
Fraser. "There are no party politics in the Corporation and
this enables us to talk in an unbiased way. We don't lobby for
any one industry. My main interest is the international
competitive position of the City."
Fraser and the Corporation have two key tax priorities at
the moment: fighting the introduction of a financial
transactions tax (FTT) in Europe and campaigning for the
abolition of the 50% rate of tax for anyone earning more than
£150,000 ($206,000) a year in the UK.
The European Commission issued a proposal in September for a
tax of 0.1% on trading in shares and bonds and 0.01% rate on
"The FTT is defined as not applying to where the trade is
but where the institution is domiciled. That could severely
damage the City's position," Fraser says.
While the 50% tax rate for the highest earners in the UK is
an individual tax, Fraser believes it is affecting the
decisions corporations make about where to locate operations.
He emphasises the point that it applies to everyone earning
that level of income, not just finance industry
"This [the 50% tax] is important to overseas firms," he
says. "They don't decide to relocate, their staff do. Clearly,
tax has to be high on the list."
Fraser does not believe the 50% rate is here to stay.
"It's a token tax. It is accepted by the government that it
needs to go. It's just a question of when."
One can be sure that whatever the outcome of the various tax
policy discussions that are under way, Fraser and his committee
will continue to be at the fore of any moves towards creating a
tax competitive financial services industry.
Senior adviser, European Environment Agency
One time director of Friends of the Earth in the UK, David
Gee has been a lifelong campaigner for environmental causes and
is a highly respected figure among those calling for green
Now living in Copenhagen and senior adviser on science,
policy and emerging issues at the European Environment Agency,
Gee is one of the most prominent voices calling for a shift
from taxation on labour to environmental taxes.
"Taxes on labour and capital have a deadweight cost, you
lose welfare if you raise them," says Gee.
The deadweight cost of taxation is the economic loss
suffered by society because of the tax, such as reduced
incentives to work, to employ or to consume.
"You don't get this with environmental tax," says Gee.
Gee notes several linked factors which are eroding
conventional income tax bases. A shrinking employment force,
combined with an expanding and an aging population, highlights
the need for an intergenerational revenue raiser.
"Environmental tax is a tax on lifetime consumption," says
These ideas have gained support at the European Commission
and are often represented by the OECD in their economic
Alfredo Gutierrez Ortiz-Mena
Commissioner, Servicio Administracion Tributaria,
Described as a "formidable head of the tax administration,"
Alfredo Gutierrez Ortiz-Mena has helped to guide Mexico through
the global financial crisis, simplification of the tax code in
2009, and is lauded for his transformation of the SAT into an
open, transparent and interactive body.
"In the past, the tax administration was a bit hostile
towards taxpayers. Alfredo has changed that and the SAT is now
more open and willing to engage with taxpayers," said Manuel
Solano, director, ITS Latin America, Ernst & Young. "The
successes with advance pricing agreements (APAs) are one
example of this."
The success of the APA programme is evidenced by the fact
that the SAT has issued more APAs than any other Latin American
country, a trend which also applies to auditing more
Altering the way SAT is run, and the public perception of
the revenue authority, has not been easy, but Gutierrez
Ortiz-Mena has facilitated the transition through open dialogue
"Open administration has been achieved through a tremendous
effort in letting taxpayers know what's on the table and
ensuring equal treatment," said Solano.
His investment in strengthening the tax department has not
gone unnoticed by taxpayers and advisers who regularly interact
with the SAT.
"Alfredo has invested large resources hiring very
professional and experienced people in the area of
international tax and in the litigation department in the past
years, which has changed the view of taxpayers and from
taxpayers with regards those matters," said Manuel Tamez,
partner at Mijares Angoitia Cortes y Fuentes.
Mexico has been a pioneer in terms of dealing with tax
legislation and tax collection in Latin America, and this is in
no small part down to the work of the head of the SAT. For
instance, Mexico was the first country in the region that
enacted transfer pricing rules and a worldwide system of
taxation, as well as introducing controlled-foreign company
legislation, and others in the region have since adopted
Mexico has been one of the countries that responded well to
the challenges thrown up by the global financial crisis, such
as declining tax revenues, and again Gutierrez Ortiz-Mena has
been central to this.
"Mexico enacted a flat tax a year before the global
financial crisis and this has been a very successful mechanism.
Mexico suffered a lot at the outset of the crisis, but our
recovery has been faster than neighbouring countries," said
Norm Vojir is responsible for handling one of the most
notorious transfer pricing cases in the world. The
GlaxoSmithKline (GSK) dispute, dating back to the 1990s, is
still under deliberation in the Canadian courts, with the
company having now filed its arguments to the Supreme Court,
meaning a verdict may be delivered soon.
The transfer pricing issues in the case stemmed from the
costs GSK Canada attributed to the production of Zantac. It
bought the generic drug in powder form from a Swiss company.
GSK maintained that the price it paid, which was much more than
what the drug cost two Canadian generic drug makers, had to
take into account the costs of a licensing deal with its
"The court [ruling] will provide precedents in terms of
whether or not the comparable uncontrolled price (CUP) the
revenue thinks they have with the generic active ingredient is
actually a CUP," said Brad Rolph of Charles River Associates in
Toronto. "That's effectively what the CRA is hoping the Supreme
Court will determine."
Permanent Secretary for Tax, HMRC, UK
Dave Hartnett is the Permanent Secretary for Tax at HM
Revenue and Customs (HMRC) in the UK. While his influence is
waning over the Goldman Sachs debacle – for failing to
disclose information concerning an error in dealing with the
bank's tax affairs that cost the Exchequer up to £8
million ($12.6 million) – the civil servant is heavily
involved with the OECD, helping to expand tax policy in
In April, Hartnett told delegates at an IFA tax planning
event, held at the OECD, that HMRC confirmed that the UK is to
lead a survey into the practicality of global transfer pricing
The survey will offer new international operational
guidelines for tax administrations and taxpayers.
Hartnett hopes the survey will result in "day-to-day
practical guidance" for everyone involved in transfer
"The survey will not step on the work of the OECD's Working
Party 6 [transfer pricing] but will only enhance the
understanding of transfer pricing," he said.
"We want taxpayers to share more information with the
authorities and we want administrations to rely more on
economists to decide whether a transfer pricing case is worth
"I also hope we will see a greater reliance on integrated
documentation systems. We have found [in the UK] that this has
been very effective in rooting out the key transfer pricing
issues," said Hartnett.
Martin Hearson is ActionAid's tax policy adviser. He leads
the development of policy for ActionAid's campaign work in tax
and, increasingly, his work focuses on engagement with revenue
officials and civil society organisations in developing
Hearson takes a leading role in international civil society
networks, as a member of the OECD's informal task force on tax
and development and of the global board of the Tax Justice
Network. He was the co-author of ActionAid's report: Calling
Time: How SABMiller should stop dodging taxes in Africa, which
led to a specially convened meeting of the African Tax
Administration Forum earlier this year.
The SAB Miller report was revolutionary in the way it
captured the public's attention, placing the spotlight firmly
on transfer pricing in mainstream media. The report shows Accra
Brewery, SABMiller's subsidiary in Ghana, pays 4.6% of its
annual turnover in management fees to Swiss subsidiary, Bevman
Services. In 2010, this figure was $1.5 million. However,
ActionAid could not find evidence of any services warranting
ActionAid hopes the report will lead to SAB Miller
undergoing audit in at least five different African countries:
South Africa, Ghana, Tanzania, Zambia and Mauritius, who have
already met to discuss the issues raised in the report.
ActionAid's report, and others like it – including
a recent expose of 98% of UK FTSE 100 companies using tax
havens to transfer profits to low-tax jurisdictions, avoiding
tax in the UK – commands the world's attention and
means companies are more concerned about their corporate image
and the way they organise their tax and transfer pricing
affairs. Bad press can lead to extensive audits from a number
of revenue authorities and a loss in sales.
European Commissioner for Climate Action
"My ambition is to see, by the end of my mandate, a Europe
that is the most climate-friendly region in the world," says
With EU targets to see a 20% cut in CO2 emissions
by 2020 and a 20% improvement in energy efficiency, few
instruments will be as powerful in delivering the results as
Among Hedegaard's key roles at the Commission is to develop
the Emissions Trading Scheme and to promote links with similar
schemes around the world to help build an international carbon
It is an ambitious project, but one for which Hedegaard's
past life as Denmark's Minister for Climate and Energy has
prepared her well. Denmark is considered by climate activists
to be ahead of the curve when it comes to environmental
taxation and it was Hedegaard who implemented the framework in
As other European countries look to follow Denmark's lead in
setting prices on carbon, Hedegaard's legacy in the field of
indirect tax, and her place in the list, are assured.
Former secretary, Australian Department of
Treasury; special adviser to the Australian Prime
Ken Henry, as a special adviser, has the ear of Julia
Gillard, Australia's Prime Minister. Back in 2008, a summit at
Parliament House called for a "root and branch" review of the
tax system. The then Treasury Secretary, Henry was commissioned
to write it and came up with 1300 pages after 19 months of
Despite initial plans to dramatically overhaul the entire
system, the government was criticised for being too cautious in
its response to the review into tax reform, despite initial
plans to dramatically overhaul the entire system.
The report rejected a number of suggestions from Henry. Of
the 138 recommendations, only five were accepted and a further
29 were dismissed. The rest were subject to a further
Highlights of the response include the staged reduction in
the corporate tax rate and the introduction of a new Resource
Super Profits Tax. He also played a key role in the
introduction of the minerals resource rent tax.
So far not a single one of Henry's tax recommendations has
been implemented. This was always going to be the case because
through legislation and through implementation, which is the
much harder part of tax reform, means they are not likely to
see the light of day just yet. But now, it turns out the Prime
Minister wanted to keep him to advise her about tax and Asia.
Henry is to use his considerable tax knowledge and experience
to tell Gillard how Australia can position its tax system to
help the country compete across the rest of the region.
Academic, London School of Economics
Michael Jacobs was former UK Prime Minister Gordon Brown's
special adviser on the environment. Out of office, he is a
visiting professor at the London School of Economics, but his
influence can still be felt in environmental laws today.
Jacobs was advising Brown on environmental matters even
before he became Chancellor of the Exchequer.
"I wrote a report in 1996 with Dan Corry of the Institute
for Public Policy Research recommending what eventually became
the Climate Change Levy," says Jacobs.
Before moving to 10 Downing Street, Jacobs worked at the
Treasury where he originated and oversaw the Stern Review on
the economics of climate change and oversaw environmental tax
and spending reforms in seven budgets. As such, current UK
environmental tax policy owes a lot to him.
While Jacobs does not believe tax alone is enough to tackle
climate change, he does see it as a necessary tool.
"There is no question that tax can and must be used to
tackle climate change," says Jacobs. "Pricing carbon properly
is absolutely central to tackling climate change. Without this,
the climate change externality is simply not factored into
business, finance and consumer decisions."
Joint International Tax Shelter Information
The Joint International Tax Shelter Information Centre
(JITSIC) has had a profound impact on the identification and
prevention of abusive tax transactions. At JITSIC's inception
in April 2004, the tax commissioners of Australia, Canada, the
UK and the US agreed to share expertise, information and best
practices in tax administration to tackle abusive tax schemes
and deter promotion of, and investment in, such schemes.
JITSIC has been of central importance in raising awareness
among taxpayers as to the risks of using or promoting abusive
schemes, and this has not only curbed their use in a deterrence
sense, but also made it more difficult for those who still wish
to engage in abusive tax activities.
The increased knowledge of abusive tax schemes that JITSIC
participants have garnered since its introduction also mean
that new methods of abuse can be anticipated.
The work of the JITSIC has also enabled further development
in the fight against harmful tax practices. The emergence of
joint auditing as a way of boosting international compliance,
which has benefits for both taxpayers and tax administrators as
it reduces the administrative burden of dealing with audits in
multiple jurisdictions, is just one example of this.
JITSIC has offices in both London and Washington DC, and the
National Tax Agency of Japan has accepted an invitation to join
the task force, with representation in London, ensuring the
continued expansion of the group's scope and influence for the
Commissioner of the State Administration of
China's tax development can be characterised rather crudely
in two steps. First, the government attracted foreign business
to the country through the offer of tax incentives and
favourable tax rates. And with last month China reporting a
third quarter growth rate of 9.1%, it seems this tactic has
paid off as companies see China as a rich source of new cash.
But in recent years, China entered into stage two: to start
taxing these businesses more aggressively as the government
knows that companies have little option but to be located in
China. Xiao Xie has been influential in this progression.
He has been the commissioner of the State Administration of
Taxation (SAT) since August 2007. He joined the Ministry of
Finance after graduation and had been working there for the
previous 23 years. Formerly, he was the deputy minister of the
Ministry of Finance before being appointed as the deputy
governor of Hunan Province in July 2005.
His efforts culminated in the publishing of China's 12th
Five-Year Plan in March. The plan outlines, among other
aspects, how the country's tax system will be used to shape
economic growth in China.
One of the one of the key initiatives is to expand VAT to
gradually phase out business tax. VAT applies to sales and
import of goods as well as provision of processing and repair
services, while business tax applies to provision of a variety
of other services and sales of intangible or real property.
China is one of the very few countries, if not the only one,
that still tax goods and services differently. Taxpayers have
complained about business tax for years, such as duplicate
taxation, high tax rate and non-credibility. On a trial basis,
two types of service industry, construction and installation as
well as transportation and shipping, could be switched to be
taxed under VAT as early as in 2012. Such switch would
effectively lower the tax burden on those two service
industries by allowing input credit. The ultimate goal is to
tax all goods and services under one VAT umbrella to provide
strong boost for all service industries. Since business tax is
one of the major tax revenue sources to local governments for
the moment, the allocation ratio of VAT to local governments
will be revised upward upon phasing out business tax.
Sarosh Homi Kapadia
Chief Justice of India
Mohan Parasaran, senior advocate and additional solicitor
general of India provides an insight into the work of Kapadia
and explains why the whole tax world is waiting for his
judgement in the Vodafone dispute.
Ever since Justice Sarosh Homi Kapadia was appointed as an
Additional Judge of the High Court of Judicature at Bombay in
1991 (before his appointment as a Judge of the Supreme Court of
India in 2003 and later, Chief Justice of India in 2010), he
has been known for his contributions to the development of
Indian tax law. The wide range of areas within tax law on which
he has delivered several landmark judgments is remarkable and
only a few are mentioned here to highlight those areas where he
has made the most impact in the development of tax law
jurisprudence in India.
In the area of international taxation, his judgments, have
gone a long way in clarifying the law relating to, transfer
pricing (Morgan Stanley), deduction of taxes on
salaries paid to expatriates (Eli Lilly), deduction of
taxes on royalty payment on software (GE India
Technology), and definition of permanent establishments
for the purposes of double taxation avoidance agreements
(Morgan Stanley). In a time where the growing
liberalisation and globalisation of India's economy has
presented new and complex forms of economic activity, his
judgments on such areas as the taxation of income under
production sharing contracts for oil and natural gas (Enron
Oil & Gas), and dividend stripping (Walfort Stocks
& Shares) have helped lay down a certain and decisive
course for tax law to follow in many years to come.
Analysing his judicial output over the last 20 years, two
things strike the discerning reader; the clarity and simplicity
of his judgments, and a willingness to refer to non-legal
sources such as accounting standards, academic works, and
business practices to lay down the law. In an era when the
quantity of tax cases being heard and decided in judicial fora
can overwhelm even the most conscientious tax practitioner,
Justice Kapadia's clear and precise judgments present a welcome
relief from the verbose and contradictory dicta that plague
much of tax jurisprudence. His attempt to adopt a more holistic
approach to taxation that moves beyond narrow legal disputes
and acknowledges its place in the arrangement of human affairs
in business and trade must be welcomed.
Before completing his tenure as the Chief Justice of India
in September 2012, Justice Kapadia is also poised to lay down
the law on the taxation of offshore mergers and acquisitions of
Indian companies in the legal challenge to the tax demand on
Vodafone International's acquisition of Hutchison Essar's
telecommunication business in India from the Hong Kong based
Hutchison Group which was heard by a three-judge bench headed
by him. This is probably the first case of its kind being heard
by the highest judicial authority, not only in India but
anywhere in the world, and Justice Kapadia's judgment in this
landmark case is likely to have a decisive impact on the future
development of international tax jurisprudence. At a time when
several multi-billion dollar cross-border M&A transactions
are coming under the scanner of revenue authorities, Kapadia's
judgment is likely to lay down the marker for revenue
authorities and tax practitioners everywhere on the taxation of
such transactions. Chief Justice Kapadia is highly acclaimed
for his deep knowledge of law, impeccable integrity, for being
a hard taskmaster and for restoring the institutional integrity
Senior director of group tax, Danfoss
There are many constants in this world like death and the
northern star. Companies not liking new taxes is one of
But adversity breeds innovation and Thomas Keller, senior
director of group tax at Danfoss, is one of the few people to
see energy taxes not as an obstacle for business, but an
In 2009, partly because the company was making a loss,
Danfoss paid more in environmental taxes in Denmark than it did
in corporate tax.
Denmark is well ahead of the curve in implementing green tax
reform and one of its leading producers of components and
solutions for refrigeration, air conditioning, heating, water
and motion controls has been keen to take advantage of it.
Danfoss was the first company to introduce thermostats on
radiators, a clear example Keller says, of how taxing energy
and carbon use can encourage greener innovation, helping both
businesses and consumers.
"Much of a company's time is spent looking at tax as a
corporate cost, not as a driver of innovation," says Keller.
"It's different at Danfoss because we make energy saving
products. Our core business is climate and energy, we looked at
our business and decided to specialise in it. Tax is more than
just a cost for us."
While Keller is supportive of sustainable business with an
eye on its carbon footprint, he is looking clearly at the
"We're in it for the money, there's a market for us," says
Keller says Danfoss has taken a large chunk of the solar
power market, but their main focus is on the market for heat
pumps which, Keller argues, put give four times as much energy
back than what was put in. A handy device at a time when energy
is now another item to be taxed.
Keller says the price of energy is directly involved in how
his company does R&D, which makes up 5% of its
Keller is critical, however, of existing environmental tax
policies in Denmark, arguing that because the 2009 reform
increased taxes on the use of electricity by more than on
fossil fuels, it removed some of the incentives for green
"We argued against it, but hit a wall," says Keller.
"Denmark is a welfare society, it needs fiscal revenue."
Nevertheless, Keller is a rare example of companies and
activists coming together from different directions to support
effective green tax reform. As David Gee, senior adviser at the
European Environment Agency put it: "You're one of the winners
from this tax. Broad organisations such as trade associations
go at the pace of its slowest members. They're not into
progressive reform. Will you help us defeat the losers'
Whether or not Keller is on board for that, remains to be
seen, but if more companies follow his example, they will
recognise that tax does not have to be taxing and contentment
is the enemy of invention.
President, Capital Markets Tax Committee of
The Capital Markets Tax Committee of Asia (CMTC) is a
financial services industry body consisting of a number of
banks, investment banks, securities firms and other diversified
financial services institutions operating in Asia who are
represented through their regional tax directors, most of whom
work in Hong Kong.
Jocelyn Lam, CMTC president, highlights the importance of
Why the CMTC exists
The CMTC provides a forum for discussion by corporate tax
managers responsible for the tax affairs of investment banks,
securities firms, banks and other diversified financial
services institutions of topical taxation issues in Asia
affecting their capital and securities markets and similar
activities. We represent the interests of our members through
acting as the respected voice and to participate in liaison or
advocacy activities on tax matters either directly or
indirectly through representation with other groups or
societies concerned with or by fiscal matters.
Why the CMTC is influential
We have a broad representation from the industry in the
region consisting of tax professionals with diverse
international background and knowledge base. We have a good
network through our members and advisors to allow our voices be
heard by the right forums and decision-makers to make a
difference. We are proactively involved in tax policy formation
so we can pre-empt issues and not solely deal with issues when
What the CMTC does
In the past few months we have made submission to the OECD
on draft changes to definition of beneficial ownership in the
model treaty. It was followed by a roundtable discussion with
Pascal Saint-Amans (the next head of the OECD's Centre for Tax
Policy and Administration from Feb 1 2012) during his visit to
Hong Kong in September to present our comments
We have made numerous to the Indian Parliamentary Standing
Committee to present our recommendations on the Direct Taxes
Code on key topics such as GAAR, FII (financial institutional
investor) taxation, expansion of deemed income rules and branch
profits remittance tax.
Finally we recently made submissions to the State
Administration of Taxation in China on QFII taxation, as well
as in the process of forming a government-industry joint
working group to study and formulate a VAT regime for financial
institutions operating in China as part of the country's
indirect tax reform.
Michael Lennard is the chief of international tax
cooperation and trade in the financing for development office
(FDO) of the UN. The UN is drafting a practical manual on
transfer pricing for developing countries. The manual aims to
provide clearer guidance on the policy and administrative
aspects of applying transfer pricing analysis to some of the
transactions of multinational enterprises (MNEs) in particular
for developing countries. A number of countries outside the
OECD are developing and implementing transfer pricing
regulations and UN is often seen as more representative of the
countries' overall economic needs.
At its annual session in 2009, the UN Committee of Experts
on International Cooperation in Tax Matters mandated a group
called the Subcommittee on Transfer Pricing –
Practical Issues to develop a practical manual on transfer
pricing to reflect the realities for developing countries, at
their relevant stages of transfer pricing implementation and
development. In fulfilling that work (expected to be completed
in 2012) the subcommittee draws upon the broad expertise of its
participants and from other sources as it sees fit. Its work is
not funded so it does not commission studies. The manual will
be based on these principles:
- That it reflects the operation of Article 9 of the UN
Model Convention, and the arm's-length principle embodied in
it, and is consistent with relevant Commentaries of the UN
- That it reflects the realities for developing countries,
at their relevant stages of capacity development.
- That special attention should be paid to the experience
of other developing countries.
- That it draws upon the work being done in other
Canada Revenue Agency; OECD
As chairwoman of the OECD's Working Party No 6 (WP6),
responsible for carrying out the project on the transfer
pricing aspects of intangibles, Levac is a very influential
woman in transfer pricing this year. The draft document is
expected in 2013 but many think the project is too complex to
deliver anything at such an early date. (Info on why project is
so important to taxpayers)
Levac is also the transfer pricing specialist at the Canada
Revenue Agency and a director on the board of the Canadian
Institute of Chartered Business Valuators. Levac has more than
16 years of experience in the determination of arm's-length
price in the context of business equity valuation and transfer
pricing, including testifying as an expert witness on valuation
issues and negotiating transfer pricing cases with foreign tax
authorities. Levac researches, analyses and provides technical
expertise on transfer pricing issues for the Canada Revenue
Agency and is active in developing the OECD Transfer Pricing
The intangibles project will give multinationals and revenue
authorities, globally, more guidance and clarity when
approaching intangible assets.
"WP6's enhanced engagement with [non-OECD members] and
business will ensure relevant guidance is developed and applied
by a greater number of countries worldwide. WP6 has the
potential of adding significant certainty, in the near future,
to the transfer pricing of an increasing number of material
transactions involving intangibles. WP6 will also be promoting
best practices and developing practice tools to increase
efficiencies in the administration of transfer pricing," said
US House of Representatives
Sander Levin is the ranking member of the House Ways and
Means Committee which handles, among other areas, tax policy.
In this role, he has overseen important efforts aimed at
reforming tax law to aid recovery from the global financial
As well as having a key role in salvaging or creating around
3.3 million jobs through the American Recovery and Reinvestment
Act of February 2009, Levin has introduced various legislative
changes to help small and medium sized enterprises, including
the elimination of capital gains tax on investments in
qualified small business stock in 2010.
He is a strong proponent of the R&D tax credit, and has
worked closely with Rep. Dave Camp on this, striving to ensure
companies have an incentive to invest in R&D in the US.
Levin is also a frontrunner in championing international tax
reform with a view to ensuring business competitiveness.
The contribution of the Levin family, more broadly, to tax,
is also noteworthy. Sander is the brother of Carl Levin, the
Michigan Democrat who, together with Senator Chuck Grassley
(Rep-Iowa), proposed the Levin-Grassley Bill aimed at requiring
states to acquire information on the beneficial ownership of
companies operating therein.
Commissioner, South African Revenue Service;
Chairman, African Tax Administration Forum
Oupa Magashula is leading the way for enhancing and
harmonising tax administration across Africa.
As the chairperson of the African Tax Administration Forum
(ATAF), Magashula has brought together 34 tax administrations
from across the African continent to provide skills training
and to create a platform for African tax and customs
administration to develop and share expertise and
"The biggest problems tax administrations face is the lack
of capacity. We are trying to improve this through ATAF but a
lot of our members need more capability. The result of this is
that they are unable to investigate complicated structures and
undertake complex audits," said Magashula.
In the 18 months since ATAF was created, Magashula has
arranged a number of events all with the target of improving
knowledge and cooperation.
"The first task was to draw up an agreement for all ATAF
members to sign. This involved a lot of work as trying to get
34 countries to agree to a set of rules is no easy task.
"We are not a political organisation and we will not let
politics hold back the development of tax administration in the
Despite the efforts of the ATAF, Magashula is quick to
acknowledge that the development of the organisation will not
grow without outside help.
"We have people over from HM Revenue & Customs in the UK
who are helping to develop our transfer pricing rules and we
will soon be taking on 75 officials from India to help us
create a simple system."
While the size of some member's tax departments pale into
insignificance when compared to the tax teams at accounting
firms operating in that country (Malawi's tax audit team is
outsourced to Deloitte), Magashula is about to oversee the
continents first joint audit.
"In the next few weeks seven members of ATAF will be working
together on a joint audit of a large multinational. This is a
great step forward."
ATAF also recently launched a weekly newsletter for
officials and taxpayers to encourage more dialogue between the
All of these developments have come about as a result of the
hard work of ATAF and the determination of Magashula to improve
Africa's tax administrations.
Samuel Maruca is the transfer pricing director for the large
business and international (LB&I) division at the IRS
– a new position, marking the importance of transfer
pricing in global affairs. Maruca has the influence to change
the process of dispute resolution in the US – a much
needed renovation at the IRS, which has a major back-log of MAP
and APA cases.
"Surveys show that transfer pricing is the most significant
international tax issue globally, and international tax matters
generally are a high priority for the IRS," said Maruca. "The
IRS is also in the process of migrating to an issue-based model
from a more case-based model. Given these trends, it makes
sense to centralize and integrate the IRS' approach to transfer
pricing. Creating an integrated practice under a single
director will enhance case development at all levels, build the
knowledge base, promote consistency, and improve our
competitive position vis-à-vis our treaty partners."
Maruca will develop and coordinate LB&I's transfer
pricing strategy, training, and operational approaches to key
transfer pricing matters arising in field examination,
competent authority and the advance pricing agreement
It is likely the US will focus more on both inbound and
outbound transactions, involving foreign-controlled domestic
operations and US control of foreign operations, since this
Nobel prize-winning economist, Sir James Mirrlees, headed
this year's Mirrlees Review, which brought together a group of
international specialists to examine the features of an
efficient tax system in the UK.
The review identifies the characteristics of what its
authors consider to be a good tax system for any open,
developed economy in the 21st century.
Looking at the package of taxes in the UK, from corporate
and indirect, to personal, it assesses the extent to which the
UK meets the ideal and how it could be improved. One of the
review's most radical suggestions was removing the zero rate of
VAT, not least because charging VAT on essential items can hit
poor households hard, while hurting the retail sector.
"Our proposal is that benefits should be raised so as to
compensate lower income households for the increased cost of
food, children's clothes and so on," Mirrlees tells
International Tax Review. "That would make the system
fairer as well as more efficient. We would oppose any increase
in VAT on food items that was not accompanied by compensating
changes in income-related taxes and benefits."
Mirrlees also recommended simplifying the tax system, an
important objective already high on the government's list of
priorities, and setting a consistent price on carbon –
an idea that carries a lot of weight with green fiscal
Chairman, Empowered Committee of State Finance
When Sushil Modi, finance and deputy chief minister of the
state of Bihar, was elected this year to chair the committee in
charge of implementing GST, he became one of the most important
tax officials in India.
GST has been delayed a number of times and the latest
predictions suggest it will miss its April 2012 implementation
The process has been marred by disagreements between the
states, with a number of Bharatiya Janata Party (BJP) state
It falls to Modi to build a consensus on the issue and as a
BJP politician, he may be ideally placed to do just that.
Last month Modi announced the creation of a new GST network
which will implement the IT infrastructure necessary to
introduce the new tax.
"We have approved the special purpose vehicle (SPV) and
requested the go ahead for the IT infrastructure," says Modi.
"The SPV would solely be responsible for running of the GST
Despite the delays, the new network is a sign of the Modi's
commitment to a smooth roll out of GST.
They say you can judge a man by the strength of his enemies
and Richard Murphy, an accountant who largely turned his back
on his trade to become a tireless campaigner for tax justice,
has made some very powerful ones in the world of international
business and among his former peers.
Much like Marmite, you may love him or hate him, but Murphy
has never shied away from his campaign to stamp out tax
avoidance through country-by-country reporting, a standard he
claims he was instrumental in devising.
"We want to know what tax companies owe, where they owe it
and the profits and losses they make in each jurisdiction,"
says Murphy. "And we want to know how many people you employ
and where. We want to know who you exploit. That is what this
is about, the poorest people in the world."
A founder of the Tax Justice Network, Murphy is always among
the first to leak the information tax avoiders and tax
authorities don't want you to hear on his daily blog.
Multinationals may not like him, but they ignore him at their
VAT director, General Electric
Chris Needham is a taxpayer in the rare position of having
worked for both a tax authority and one of the Big 4 accounting
firms. He spent five years as a senior VAT Inspector with the
then HM Customs and Excise in the UK, before joining PwC as a
Now heading up General Electric's VAT department, he has
been one of the most vocal taxpayers on the need for European
VAT reform, addressing conferences around the world on the
Speaking to a packed event in Milan to wrap up six months of
public consultation on the future of the European VAT system,
Needham noted the crucial role business plays in collecting the
tax and tackling fraud.
"Business is the unpaid tax collector for the government and
must bear the administration burden," said Needham. "Legitimate
businesses are partners with the authorities, not
He argued that business wants to see one simple VAT system,
not 27 separate ones, including binding rulings, one compliance
process, a harmonised rate across the EU and a partnership
"My Easter holiday was ruined by a deal that nearly didn't
go through because of complexity," Needham said. "It's harder
to do a deal within the EU than outside it because of the VAT
system. That's a terrible thing to have to say."
Finance minister, Ireland
Given Ireland's economic woes, it might seem curious to
include its Finance Minister in a list of the world's 50 most
influential people in tax. But Michael Noonan, who assumed
office in March this year, has come up with an interesting way
to stimulate sectors of the Irish economy with targeted VAT
cuts, temporarily lowering its rate for a number of businesses
including hotels and restaurants from 13.5% to 9% in a bid to
boost its tourist industry.
"The purpose of this targeted VAT relief is to boost tourism
and stimulate employment," said Noonan.
While the cut was indented to run until 2013, it may well
become permanent as signs are that businesses are passing on
the benefit to consumers.
If Noonan's targeted VAT exemptions work to save struggling
sectors of Ireland's economy, it may well prove an influential
model for other countries to follow, including neighbouring
Britain where the government has so far resisted opposition and
industry calls for VAT cuts.
Office of Tax Simplification, UK
Michael Jack & John Whiting
No UK taxpayer would call Preston a test bed of the
simplicity of the country's tax system, but, says John Whiting
(pictured on the right), it illustrates well the impact of
Britain's Office of Tax Simplification. The tax policy director
of the Office of Tax Simplification was speaking to
International Tax Review after a workshop about the
Office's small business review with 12 taxpayers in the north
of England city.
"They [the government] can't gainsay this," he said. "This
is what Preston people are experiencing."
When George Osborne, the new UK Chancellor of Exchequer, and
David Gauke, the tax minister, inaugurated the Office of Tax
Simplification (OTS) in July 2010 it was a statement of intent
as much as a promise that the tax system would become easier to
The establishment of the OTS, which advises the government
on how to simplify the tax system to reduce the compliance
burden on companies and individuals, was one sign of the
just-installed government's commitment that Britain would be
open for business.
Michael Jack, who began the Tax Law Rewrite project when a
Treasury minister in a previous Conservative government, became
the OTS's first chairman. Whiting, the well-known former PwC
tax partner, was appointed its first tax policy director. Both
were confirmed in their positions permanently in September
"We were given two small projects, to start with," says
Whiting, "but I had firmly in mind a third project: get
established, create a way of working, start to show we can make
a difference. Our reports have begun to have influence with the
media, but more importantly with Treasury and ministers."
So far, the OTS has identified more than 1,000 reliefs in
the UK tax system and made recommendations to the government
about which of these should be retained, simplified or
abolished; begun a project to simplify tax administration for
small business and started to review how pensioner taxation and
employee share schemes could be made simpler.
The effect on large business has not been dramatic yet,
though the OTS is not supposed to be a substitute for tax
reform, such as amendments to controlled foreign companies
legislation. which is also under way. It is the Office's intent
to try to simply the system that is important.
While Whiting acknowledges that, so far, the OTS's target
has been the simplification of the taxation of small business,
he points to the just-started share scheme project as an
example of work relevant to large business.
"These schemes are widely used by big business. It is
horrendous trying to comply in various different countries
using the practical share schemes these companies have
proposed," he says.
Director, OECD Centre for Tax Policy and
Nobody involved in international tax would dispute the
inclusion of Jeffrey Owens as a key influence on tax. Had he
achieved just half of the things he has done during his more
than 30 years as a civil servant, there would still be a case
for his place being warranted, but his entry in this list
focuses on Owens' leadership of, and contribution to, the OECD
project on beneficial ownership.
The distorted and varied interpretations of the concept
beneficial owner have led to a risk of double taxation and
non-taxation, prompting the OECD to seek clarity on the term's
meaning. A clear definition or understanding is desirable
because the term influences the applicability of treaty
benefits to those receiving dividends, royalties and
"More than 30 years after the introduction of the beneficial
ownership concept in the OECD model treaty, uncertainty still
remains even though it is a very important concept in
international tax," said Marc Sanders, partner at VMW Taxand in
the Netherlands. "The Indofood and Prevost cases are clear
examples of the different approaches [in terms of economic
interpretation versus legal interpretation]."
On April 29 2011, to address problems such as the definition
being too broad – which has led to repeated
discussions and court cases – the OECD Committee on
Fiscal Affairs (CFA) issued a discussion draft to gauge
stakeholder views. The CFA Working Party 1 has been working
with the material gathered since that point, and work continues
on tying down this slippery concept.
The OECD's recognition of the problem has been unanimously
lauded by stakeholders, who understand the complexities
involved in reaching a concrete definition. One that is too
broadly worded, for instance, would open the door for the
authorities to attack real, commercial structures which are not
aimed at treaty abuse.
The issue is also of great importance to charity and
development organisations, which point out that without
knowledge of who owns what, it is impossible for developing
countries to take action against corruption.
Following the work of Owens and the members of Working Party
1, the World Bank has also joined the call for account and
asset-holder information to be made readily available. Where
information is automatically available, compliance levels are
increased, meaning tax evasion is reduced and revenue-raising
(particularly for developing countries) is facilitated.
President, Tax Executives Institute
International Tax Review: Why did you decide to
get involved in TEI?
David Penney: I was introduced to Tax
Executives Institute (TEI) 20 years ago by my boss at General
Motors. I had joined the company from Revenue Canada, and as
part of my orientation, she described membership in TEI as
essential to my development as an in-house, corporate tax
professional. She explained the opportunities afforded to
members to engage in a broad-based advocacy process, to network
with other in-house professionals, and to obtain high-quality
education. She could not have been more correct.
ITR: What are the top three issues facing your
members around the world?
DP: First, the globalisation of taxation.
It is trite to say business has gone global.
Governments and their revenue authorities are incrementally
enacting laws and enforcement mechanisms that focus on ensuring
they get their share of the global tax pie. Moreover, tax
authorities are increasingly cooperating with one another.
Second, financial reporting standards and related control
processes, especially for public enterprises, have become
exceedingly complex. The related in-house tax administration is
often burdensome, and places significant strain on departmental
resources and workload priorities.
Finally, for individual members, keeping up with these
developments, tax professionals are not only faced with an
increase in their workload, but also with the complexity of the
laws and business environment that they work in. TEI is an
essential pressure valve for members because of its focused
educational and advocacy opportunities, as well as its status
as an unparalleled network for in-house tax professionals.
ITR: How much lobbying does TEI do?
DP: TEI does not engage in lobbying as that
term traditionally is understood. Instead, utilising its
extensive network of technically competent members and legal
staff, TEI and its committees generate a broad range of
technical and policy submissions on a broad array of issues.
Last year alone, the institute filed more than 50 substantive
submissions with various tax and financial regulators around
the world, including the OECD and the European Commission. In
addition the institute participates in myriad issue-specific
meetings with tax regulators from Canada, the US, the OECD, UK,
ITR: In your opinion, how influential can the TEI
be in shaping tax policy?
DP: The TEI is often described as an
organisation, not of tax representatives, but of taxpayers
themselves. The unique perspective we bring as in-house tax
professionals to the review of tax rules and regulations (we
are not only planners but implementers) has made TEI very
influential in the area of promoting sound tax rules and
effective tax administration. Our views are regularly sought by
regulators and policymakers, in particular, because we
represent such a broad cross-section of the business tax
community. With almost 7,000 members employed by more than
3,000 companies worldwide, we are able to effectively draw on a
deep reservoir of experiences to help shape tax policy.
ITR: What does the future hold for the tax
director at a multinational?
DP: The scope and complexity of a tax
director's duties will expand in the coming years.
Companies will remain under pressure to perform profitably
and efficiently, with fewer resources. Those pressures will
include scrutiny by a greater number of taxing authorities and
other regulators. The tax director will be at or near the
centre of these activities and will be expected to perform. To
succeed, tax directors will have to maintain proficiency with a
broad array of rules, policies and procedures. I am confident
that in-house tax professionals will be more than up to these
challenges, in large measure because they are members of TEI. I
am truly honoured to lead the organisation.
Pascal Saint-Amans will become director of the OECD's Centre
for Tax Policy and Administration on February 1 next year, when
Jeffrey Owens retires.
As head of the International Cooperation and Tax Competition
Division in the CTPA from September 2007, Saint-Amans was
responsible for the OECD's work on harmful tax practices, money
laundering and tax crimes, the tax aspects of countering
bribery of foreign officials and administrative cooperation
between tax authorities. In October 2009 he was appointed head
of the Global Forum Division, created to service the Global
Forum on Transparency and Exchange of Information for Tax
Purposes, a programme with the participation of more than 100
International Tax Review: You've been very
involved in tax transparency and exchange of information at the
OECD. Will this be one of the central themes of your
Pascal Saint-Amans: No. For the future, no.
Transparency of course is key, and we do have an agenda there.
But for me, the core business of the OECD is tax treaties,
transfer pricing, and the elimination of double taxation. We
should be back to our core business, I'm not sure we've left
it, but we could strengthen that to make sure we have the right
and implementable principles. On this part of the core
business, maybe what could be done is more emphasis on the
practical aspects. How do you make sure that developed as well
as developing countries implement the rules properly. Sometimes
I wonder whether we are over sophisticated on transfer pricing
and tax treaties and maybe we should bring more clarity
ITR: Is there anything you would do differently
PS-A: Of course, yes. Jeffrey has developed
something which is really amazing and that's a great success
story. The CTPA cannot be managed without him as it was with
him. We need to change the business model and structure it
differently, make sure we have a strong team here and
sustainable development for the future. And we need to build on
the successes that Jeffrey has ensured.
ITR: What projects that Owens began are you
particularly keen to expand on?
PS-A: It's not a one man show, the OECD.
But I would like to develop the holistic approach to the
non-OECD countries so they're happy with our work, they're more
involved and we learn from them. We need to strengthen our
relationship with the IMF, the World Bank and the UN. There is
no turf here, we should converge and make sure we deliver at
the best cost. I have started to develop strategy. I'm meeting
a lot of government officials. In the coming weeks, I'm
travelling to South Africa, Argentina, China, Brazil, India.
I've just got back from Turkey and I'm going to Washington, DC.
I'm also meeting a lot of people in the business community,
which I think is very important.
For the full interview with Pascal Saint-Amans, check
out the February 2012 issue of International Tax
Head of Tax, GE, US
As vice president and senior counsel for tax policy and
planning at GE, the biggest industrial company in the US, which
he joined in 1988, John Samuels carries some influence. The
breadth of his experience as a tax partner at a law firm and
five years as deputy tax legislative counsel and tax
legislative counsel for the Treasury Department in Washington,
DC, as well as a lengthy academic career, first at New York
University and for the last 14 years at Yale, means that he is
influential and his advice is highly valued. In 2009, he
received a Distinguished Service Award from the Tax Foundation,
a Washington, DC group that provides tax policy education.
Being one of the world's biggest companies means that GE's
position on different issues comes in for close examination and
tax is no exception. Jeffrey Immelt, the company's chief
executive, has been prominent in the calls from US business for
an overhaul of the country's corporate tax system. This
visibility has led to some critical media comment. For example,
the New York Times ran an article in March this year about GE's
tax minimisation strategies. The company confirmed to the
newspaper that the tax department had a staff of 975. The
article, which discussed legitimate tax planning techniques and
benefits that are also available to other taxpayers, was
covered widely by other mainstream media.
The role of head of tax at GE guarantees that Samuels's
impact will always be significant.
Finance minister, Germany
Germany has long been at the heart of taxation issues within
the EU. Often collaborating with fellow top 50 member Francois
Baroin, his French counterpart, Wolfgang Schauble –
whose father was a tax adviser – has been influential
in championing the recent financial transactions tax (FTT)
proposal and strongly advocated movement to a common corporate
tax base (CCTB) and increased European tax harmonisation.
When the EC made its proposals for a common consolidated
corporate tax base (CCCTB), nine member states objected to them
on the grounds of subsidiarity – they did not believe
the proposal's aims could be better achieved at union level
– while others rejected them based on loss of
sovereignty. Such opposition meant the proposals needed
changing, and Schauble was the first man on the scene with an
alternative idea – the CCTB.
The CCTB would mean the same rules are used in each country,
but unlike the CCCTB taxable income would be determined per
country. This would allay German fears that the CCCTB could
lead to foreign losses being pooled against German profits.
Comments from the Ministry of Finance that "the [CCCTB]
process is at the very beginning; at the end we may have
something very different," imply that Schauble intends to
continue pushing for the CCTB.
Schauble's other main influence on international tax comes
in the form of his commitment to the FTT, which is so staunch
that he has even suggested that Germany will go ahead and
implement its own tax on financial transactions if it is not
On top of sending a letter to the EU Commission calling for
the implementation of an FTT, initially at European level,
Schauble and Baroin have also roped in the help of American
billionaire philanthropist, and Microsoft co-founder, Bill
Gates. This was a smart move as it has succeeded in heightening
awareness of the issue in the US and globally.
In a more domestic context, Schauble spearheaded the German
movement to reach a deal with Switzerland to stop the prospect
of tax evasion through Swiss accounts from influencing Germans'
investment decisions. Again, Schauble was the first finance
minister to tackle this issue, and the agreement he signed with
the Swiss has served as a blueprint for further agreements,
such as that reached between Switzerland and the UK.
European Commissioner for Taxation and Customs
Union, Audit and Anti-Fraud
As the European Commission's top tax man, Algirdas Semeta,
Lithuania's former finance minister, deserves a place in this
list for his work across many fields of taxation and his
attempts to use tax policy to integrate the single market.
Many of the tasks ahead of him, from the challenges of
implementing a common consolidated corporate tax base to the
best ways to tax the financial sector, are contentious, fraught
and could fall to the myriad squabbles between member
Semeta is soldiering on with proposals on both these topics,
however, while pushing to reform the EU's VAT system to make it
simpler and more efficient.
"VAT comprises one fifth of member states' tax revenue,"
says Semeta. "The importance of VAT has been increasing,
especially in the wake of the financial crisis. The shift from
direct to indirect tax is likely to continue because direct tax
is more harmful to competition."
The tasks ahead of him may seem insurmountable, but Semeta
has been consistently ambitious in his plans and, whether or
not he succeeds, he will certainly have left his mark.
If all politicians are gamekeepers or gardeners, maintaining
the status quo or making changes, then Semeta is definitely the
Federal Revenue, Brazil
Sandro Serpa is the undersecretary of taxation of the
Secretariat of the Federal Revenue of Brazil – one of
the largest global economies to divert from the OECD transfer
pricing guidelines, causing a number of double taxation
problems for taxpayers.
The Revenue is adjusting its regulations, to avoid double
taxation and, consequently, is becoming more aligned to the
OECD but, at the same time, the country is conspicuous by its
absence at OECD meetings, where it has been invited to attend
as an observer.
Brazil could influence other developing countries that are
considering implementing transfer pricing regulations, by its
separation from the OECD. Combined with the work the UN is
involved in – preparing a practical manual for
transfer pricing in developing countries – it could
encourage other countries to move away from the OECD
Chairperson, Extractive Industries Transparency
Other organisations trying to engage governments, taxpayers
and the civil society in a grown-up discussion about tax issues
could do worse than follow the example of the Extractive
Industries Transparency Initiative (EITI). The organisation has
managed to get a range of interest groups together to discuss
how they should behave in resource-rich jurisdictions around
The 12 principles agreed at a conference in London in 2003
are the starting point for engagement with the EITI. They
include calling on the governments, companies, civil society
groups, investors and international organisations that agree to
implement the standard to contribute to helping the public
understand government revenues and expenditure.
Clare Short, the former international development secretary
in the British government who chairs the EITI board, plays a
key role in driving the group's work.
International Tax Review: How did you get involved
in the EITI?
Clare Short: I got involved originally when
in government. There was the Publish What You Pay coalition,
which was hostile to mining companies, and I was involved in
bringing it and the companies together and moving forward with
these issues. Then after I left Parliament the EITI asked me if
I'd like to be chair and I said yes.
ITR: Tax compliance is not mentioned explicitly in
the EITI principles or criteria. What role does it play and
could it play?
CS: The EITI has very stringent criteria
for companies to make clear all its payments and government to
make clear all its receipts. It is also about making sure
governments are held accountable. It is the first powerful
entry into the debate.
ITR: Why has EITI been more successful than other
organisations in engaging taxpayers on issues of
CS: The initial focus was on company
payments and government receipts. Companies come under attack
because prices go up and down. If there is instability you get
anger and resentment, so they have decided that transparency is
good for them.
ITR: Most of the EITI candidate and compliant
countries are from the developing world, though the US and
Norway have signed up to implement the standard. Is the aim to
have bigger resource-rich countries, such as Australia and
South Africa, join as well?
CS: Yes. Two-thirds of the membership is
from Africa. When we ask countries such as Chile and Brazil,
they say: "is this just another standard from the North?"
If countries of the North (Northern Hemisphere) do not join,
it is a double standard. We want to be clear about what tax
they are paying. It is for the benefit of all – North
and South, OECD members and non. Transparency about tax is a
good idea for everyone.
Commissioner, IRS, US
As the 47th Commissioner of the Internal Revenue Service
(IRS), Shulman is clearly well placed to influence tax. But his
impact goes deeper than merely overseeing IRS undertakings, and
is particularly being felt at present, with the implementation
of the Foreign Account Tax Compliance Act (FATCA), and Shulman
wants other jurisdictions to take on similar measures.
FATCA, enacted as part of the Hiring Incentives to Restore
Employment (HIRE) Act 2010, was designed to enlist foreign
financial institutions to help identify non-compliant US
taxpayers. Described by Shulman as "the most important
development in international information reporting in a
generation" and as a "big step forward in our efforts to reduce
tax evasion by creating transparency and accountability in
offshore financial markets", it will impose a 30% withholding
tax on any US source withholdable payment to a foreign
financial institution made after January 1 2013. However, after
stakeholders questioned the practicality of FATCA
implementation by January 1 2013, IRS and Treasury decided to
replace that start date with a phased implementation
This stands to show the flexibility and open dialogue with
taxpayers that Shulman has helped to instil at the IRS. This is
the sort of constructive development that, if adopted
elsewhere, would make the international tax environment a much
more amicable place.
Shulman's tenure has overseen what he refers to as "the next
rung in the evolutionary ladder of international tax
administration: the progression from cooperation to coordinated
action on global tax issues". During this time, Shulman has
been central to international efforts aimed at increasing
coordinated action, such as joint audits, and his role as OECD
chairman has given him the ideal platform to enhance such
Treasurer and Deputy Prime Minister,
Not necessarily the most popular figure in his native
country, Australian Treasurer and Deputy Prime Minister Wayne
Swan was recently voted Finance Minister of the Year 2011 by
Euromoney, and from a tax point of view, too, it is
clear to see why.
Swan's name, by his own admission, is tied to Australian tax
reform. He has broadened the scope of discussion around reform
and commissioning the A Future Tax System report (the
Henry report – see Ken Henry in top 50).
"During my time in Federal Parliament I have been
associated, in particular, with reform of the tax and transfer
payments system," said Swan, and this stretches, too, to
climate change and the Labor government's carbon tax.
Under his guidance, Australia has not only taken action on
climate change by implementing the controversial price on
carbon, but also installed the minerals resource rent tax
(taking effect July 1 2012) to replace the unpopular resource
super profits tax and facilitate the extension of the petroleum
resource rent tax, as well as updating the R&D incentive
scheme and helping lead the debate on reform of the tax
"The Assistant Prime Minister and Treasurer has led a
substantial tax reform programme for the government," said
Teresa Dyson, partner at Blake Dawson. "This has resulted in
the development of new taxing regimes, notably the MRRT and
reform programmes across a broad range of taxing regimes,
including the way international arrangements are taxed,
infrastructure concessions, taxing investment structures and
taxation of trusts."
"During Wayne Swan's time as Treasurer, the volume of tax
amendments, reviews and reforms has been frenetic," she
From American colonists throwing tea into Boston Harbour to
British truckers blockading petrol stations, people have come
out onto the streets throughout history to protest paying too
much tax. It is a relatively modern phenomenon, however, to see
activists demonstrating about taxes not being paid.
Over the last year, UK Uncut has hit the headlines and high
streets demanding companies like Vodafone, Topshop and Barclays
pay their fair share of taxes, occupying shops with bold
slogans and bolder statements.
"The nature of UK Uncut is ordinary people across the
country spontaneously taking to the streets on issues they feel
strongly about," says activist Emma Draper. "The protests
raised tax evasion on the agenda and we were supported by
non-governmental organisations and trade unions."
UK Uncut's actions have certainly raised the profile and
tapped into a public mood that some of the country's richest
companies should not be dodging taxes when the government is
making cuts to public services for some of its poorest people.
It has made them an important influence, but not a welcome one
"I think it's pretty unpalatable and there's only so much
you can do to respond to that type of action," says John
Connors, director of tax strategy and policy at Vodafone, who
were targeted by UK Uncut after a Private Eye story
alleged the company had been let off £1 billion ($1.6
billion) in a settlement with HMRC after a dispute concerned
with controlled-foreign companies.
"It's very frustrating that a lobby group should jump on
some information, or misinformation, that was put about by
Private Eye and others, and then seek to mount a campaign
against Vodafone," says Connors. "It's frustrating because
there's no sensible debate, or discussion about UK tax
But there has been a debate – even Connors accepts
that companies must do more to tell society about their
contributions – and until the protesters receive a
satisfactory answer, it looks as though they are here to
Income Tax Appellate Tribunal, India
GE Veerabhadrappa was appointed as the President of the
Indian Income Tax Appellate Tribunal (ITAT) last month. The
ITAT has released countless rulings on the treatment of
transfer pricing in India, with more than 100 rulings in
transfer pricing this year alone. It stands as a major
influence in the approach to the practice, with taxpayers all
over the world using the numerous decisions as benchmarks for
their own documentation and transfer pricing strategy.
Recent influential cases include:
- Gemplus India Pvt Ltd vs ACIT (ITA No
352/Bang/2009), of October 21 2010, is a fine example of
management fees under scrutiny, where the Bangalore Income
Tax Appellate Tribunal ruled in favour of the commissioner of
income. The case dealt with regional and global management
fees. The tribunal held that an Indian associated enterprise
(AE) must establish that payments are made in equal amount to
the volume and quality of service and that such amounts are
comparable to third-party arrangements.
- The Delhi Tribunal in Abhishek Auto Industries
Limited vs Deputy Commissioner of Income Tax
(2010-TII-54-ITAT-DEL-TP), of November 12 2010, ruled
that the tax authorities cannot reject a legally binding
inter-company agreement, for payment of royalty or technical
fees approved by regulatory agencies, simply because there is
no commercial need for the arrangement.
- The Delhi Tribunal ruling in the case of Cheil
Communications (ITA No 712/Del/2010) is an initial
ruling on pass-through costs. While the authorities are
likely to appeal as it is the first of its kind, it may have
a favourable impact on pharmaceutical R&D. Cheil
Communications India, a subsidiary of South Korea's largest
advertising agency, won its appeal at the ITAT over
- Serdia Pharmaceuticals (India) Pvt Ltd v ACIT
(ITA No: 2469/Mum/06, 3032/Mum/07 and 2531/Mum/08), in
Mumbai, held that the comparable uncontrolled price (CUP)
method was the most appropriate when determining the
arm's-length price of generic drugs. The ruling is based on
the availability of comparables and whether the innovators of
the drugs are allowed the monopoly on prices during the
period when patents are in force, to recover their R&D
costs. The court ruled that, when the patent expires on the
pharmaceutical product, the higher pricing of the generic
drugs, manufactured by competitors, cannot be justified on
the basis of R&D costs.
Finance minister, Greece
Some people, the Gandhis and Martin Luther Kings of this
world, are influential because people look to them for what to
do in times of crisis. Others are equally influential because
people look at them as a clear example of what not to do.
Evangelos Venizelos, for his ineffective use of VAT policy,
falls into the latter category.
After two VAT hikes to take the struggling country's rate to
one of the highest in the EU, Greece is now facing high
inflation and widespread fraud, pushing individuals and
businesses into the black economy.
One adviser believes that Greek tax policy may have reached
an intolerable pain threshold where people have stopped
The situation has become so bad that the government has been
considering reversing the VAT rises.
Greek tax policy in recent times may be characterised by
trial and error, but with all of its financial troubles, it may
be more error than trial.
World Trade Organisation
Dispute Resolution Body
Tax disputes dealt with the Dispute Resolution Body of the
WTO have been infrequent over the years, but the DSB appears on
this list not because of the impact it has had on tax so far,
but the influence it could have in the future.
Elin Østebø Johansen of Norway is the
chairperson of the DSB, which is made up of the 153 members of
the WTO. The DSB
The results of one tax case were published this year. The
Philippines brought a case to the WTO over the taxation of its
cigarette exports to Thailand. A panel ruled in December 2010
that Thailand was in breach of its WTO obligations. Thailand
lost its appeal in July 2011 this year.
More disputes are in the system. The EU launched an appeal
in September this year about Philippines' taxation of distilled
However, a significant threat to any growing influence the
DSB may have in tax matters is the time taken to decide cases.
The Philippines first made its complaint about Thai cigarette
taxes in February 2008 but had to wait for three and a half
years for a resolution in the case. This is not long when
compared to the time taken for litigation and dispute
resolution in some jurisdictions, but it is still a
considerable length of time for the two parties to wait for a