Armando Lara Yaffar returns to the Global Tax 50 for this year.
The Mexican continues to have a key role in the development of
international tax policy, particularly for developing
countries, in his role as chairman of the UN Tax Committee.
Yaffar was also in the Global Tax 50
Lara identifies the decision to incorporate the fees for
technical services article in the UN Model Treaty as the
biggest impact of the Committee's work this year. "It was by a
very large majority," he says. "We had a very sensitive
discussion because many countries were totally opposed to that
provision. We tried not to override treaties, but to achieve a
balance. It was the most important discussion we had in the
committee. We were analysing all of these options and trying to
provide two solutions, one mandatory, one voluntary."
The Committee also launched work on the extractive
industries this year. How to update the exchange of information
(EoI) article in the model treaty is other work that is waiting
to be done. It is a topic that is close to Lara's heart as he
also chairs working group 10 on EoI at the OECD. "It has to
happen," he says.
The Committee's goals for 2015 include further work on
transfer pricing, led by Stig Sollund, particularly on
intangibles, as it moves toward a new version of the UN TP
Manual. "Intangibles are being created all the time, such as
lists of clients and we have to find a proper way to reward
such activities," says Lara. An intermediate report on the
manual is due at the Committee's next annual meeting in October
2015, with a final draft of the manual in the following year or
2017 at the latest.
Countries are also asking for technical assistance,
particularly in the area of exchange of information. "We also
have to see how BEPS develops and its impact on the UN model,"
says Lara. He is particularly interested to see what comes out
of the project on transfer pricing and country-by-country
reporting: "We have to see how to use this information in a
proper way that will supplement the arm's-length standard."
The increasing importance of the UN Tax Committee has led
many to argue that it should take over responsibility from the
OECD for international tax guidance. Lara points out some of
the difficulties with the idea: "The resources in the UN are
very limited as opposed to the OECD. Most of the work is done
by the members. It would be difficult to take on more. The role
of the UN is to focus on developing countries and to help with
capacity building as well."