|Piet Battiau was
also in the Global Tax 50
Piet Battiau has become a regular in the Global Tax 50, and
is the only person to have been included in the feature every
year since its inception in 2011 – the same year that
he became head of the consumption taxes unit at the OECD's
Centre for Tax Policy and Administration.
Since joining the OECD, he has worked on a variety of
projects, but the OECD's greatest indirect tax achievement
during his tenure was the release of the International VAT/GST
Guidelines in 2015, and the work that preceded this.
Since the Guidelines were published, Battiau has been
touring the globe to assist countries that have been
implementing parts of the Guidelines on a bilateral and
multilateral basis. Over the years, his work has focused more
on the collection of VAT from online businesses – a
key challenge for tax authorities and their systems
"The work is very much focusing on countries' efforts to
collect VAT, on the one hand from non-resident suppliers, which
is the well-known issue and generally concerns online supplies,
but also increasingly simply collecting VAT in an online
environment, even if the vendors are in the country.
Particularly when we're talking about pretty big countries."
Battiau told International Tax Review.
"Also tax administrations are increasingly struggling and
coming to us for discussions for assistance and implementing
systems to collect VAT," he continued. "That's, of course, an
area that features prominently in our Guidelines, but also
features prominently in the BEPS Action 1 report."
It is for this reason that Battiau and the OECD are
developing an implementation guide and a 'toolkit' to support
countries in implementing mechanisms effectively and
consistently. As discussed in-depth in ITR's cover
story in the November 2016 edition, a key issue for businesses
and governments is to implement tax rules for the digital
economy consistently to avoid a convoluted web of laws that
would be both costly for businesses to comply with and
administratively inefficient for tax authorities.
Battiau and his team assist tax administrations around the
world on a variety of issues, but he said that some of the most
common are refund regimes, the organisation of export-related
refunds to non-resident businesses, and how to create and
operate these mechanisms.
"It's really about finding the balance between the
importance of operating a refund mechanism from a business
perspective and from an economic competitive perspective on the
one hand, but on the other hand balancing that with concerns
such as protection of revenue," he said. "It's often a very
fine balance and it's difficult to give broad-brush advice in
that area. So we have to look at the specifics of every
country, the specifics of the economic environment and model,
the compliance culture, the administrative capacity and all
Battiau picked out the example of India, which recently
approved rules for taxation of online sales into the
"If you look at what has happened with India almost
overnight with the implementation of the requirements for
non-residents to register for service taxes, the regime is very
much based on our Guidelines. [They were designed in such a way
that] you could also implement them in a sales tax environment,
and that's what India has done."
"The implementation of the Guidelines is massive. To see a
country like India implementing a regime that is very much
based on what we've done is huge in terms of impact on business
and impact on revenue. We're very aware of our responsibility
in that area in that we really work and try to work closely
with governments and businesses to keep the compliance burden
as low as possible and keep administrative efficiency as high
Another economic powerhouse that may be on Battiau's radar
soon is the US, which is preparing for a fundamental tax
reform. Although Battiau has not been in contact with the
incoming Trump administration, a blueprint for corporate tax
changes put forward by Paul Ryan, speaker of the US House of
Representatives, shares some mechanisms with the OECD-style
indirect tax recommendations.
"Some say that what is in the Ryan blueprint might become
reality going forward. I don't have any specific information
there, but that could include the implementation of the
so-called destination-based cash flow tax. Some say that that
is close to a VAT, to a subtraction type of VAT," Battiau said.
Although Ryan's proposals are different from a VAT because it
allows for the deduction of labour cost from the taxable base,
Battiau said the mechanics might look a bit like a subtraction
type of VAT.
"It's an area of personal interest, let's put it like that.
In the sense that what's being proposed is a corporate income
tax, it's a destination-based cash flow corporate income tax,
but it has some similarities with a VAT, notably on how it
would work in an international context with adjustments,
zero-rating of exports, taxing of imports, etc."
During the next year, a key issue for Battiau and the OECD
is likely to be online digital selling platforms such as eBay
and Amazon, and how they can be part of the solution for the
collection of VAT, GST and other taxes.
"What has become very clear, very rapidly, over the last few
weeks even, is that one of our key priorities for next year is
going to be around defining the role of platforms and typically
the online platforms in a broad sense of the concept," he said.
"I am focusing on VAT and GST, but this is a question which is
cropping up more generally – how to ensure, on the one
hand, the proper tax collection and on the other hand an even
playing field in an environment where an increasing number of
businesses are selling online."