|Piet Battiau is
a new entry this year
Piet Battiau was also in the Global Tax 50
He took time out of his demanding schedule to talk about his
department's work this year, share his views on key
developments and talk about how his role is evolving over
This interview is a longer version of the article which
appeared in International Tax Review's magazine.
International Tax Review: What have
you been up to this year, Piet?
Piet Battiau: The International VAT/GST
Guidelines in became an OECD legal instrument in 2016. That
sort of increased their impact, which meant that lots of
countries started implementing at least parts of the
Guidelines. That has triggered a lot of questions for guidance
First and foremost, the B2C guidelines, which deal with the
collection of VAT on online sales. That has been a real
game-changer, as you know. A lot of countries starting to
implement, and one of the great challenges there is to make
sure that countries implement these rules, these mechanisms, in
a consistent manner.
The main purpose of what we’re doing is to
achieve consistency at international level. First and foremost
our attention has been on these systems for collecting VAT on
online sales from non-resident suppliers.
ITR: Aside from the Guidelines, how do you help
We’ve given a lot of technical assistance
countries that have started to implement these principles. But
we can’t go everywhere, so we started developing
what we called implementation packages. That was the intention
all along, that once we completed the first set of guidelines
to add them with more detailed guidance.
The first package we designed was on collecting VAT in a B2C
e-commerce space. That’s the implementation
released on October 24.
Whenever we release, at least in the VAT space,
it’s always the result of… not
negotiations, but governments working together,
discussions, identifying best practices. Even if countries
haven’t implemented those best practices
themselves, they might agree on best practices and express the
ambition that that is where they want to go.
So [the B2C e-commerce sections] attract most of the
attention, but there’s a lot of other stuff in the
Guidelines about refund systems, neutrality etc. Also in that
space, countries reach out to us very often to come along and
help them with their ongoing reforms or planned reforms.
There are many countries that use the guidelines as the
trigger to ask for guidance and advice on their domestic
reforms, which is really good because we use those
opportunities to help countries reform towards efficient tax
systems. But it takes a lot of time. There’s only
so many people in the team, and there are very many countries
What we develop – necessarily, as international
standards – is sort of generic. We then have to go
into countries and look at their tax system, their tax
administrative capacities, and look at how and to what extent
these principles can be implemented effectively. You have to
take into account the country specifics.
I was in Nigeria a few weeks ago talking to a group of
African countries: when you have discussions there,
administrative capacities are different from when you go to
China, for example. It’s actually quite
interesting and quite fulfilling in that some of my team have
gone to Asia, and they always come back with the feeling that
they have been able to do something meaningful and something
useful, and really helped countries to improve their tax
systems. Although it’s very time intensive, it
really is great work.
ITR: What else are you doing around the digital
PB: Together with the implementation
package, other things we’re working on now are
very much related to the 'talk of the day’, the
challenges of the digital economy.
What has become a really high-profile issue is the role of
digital platforms in online sales. A lot of the digital
economy, a lot of online sales, are triggered and/or
facilitated through the well-known platforms. There are also
ongoing discussions at the EU level [about] to what extent
these platforms can be enlisted in collecting the VAT in online
We already identified and sort of foresaw that that would
become an issue over time when we were working on the
guidelines a couple of years ago. The first step in developing
principles was simply to start from the basics and look at
transactions between sellers and buyers.
We all know that in the digital space there are very many
sellers, and an increasing number and variety of sellers,
people selling new stuff that didn’t even exist
five years ago. And, if you look at the statistics the number
of people buying things online, via mobile phones and via apps
is always increasing.
We already knew, a couple of years ago, that what looked as
simple as sellers and buyers would become very complicated very
quickly – not just from a tax policy perspective but
probably moreso from an administrative perspective. How do you
track all of these transactions? Even if you can, how on earth
are you going to tax them all? Are you going to enlist
thousands or even millions of new taxpayers into your VAT
system? If so, how are you going to administer those?
Probably the obvious response to that is just to look at the
multi-sided platforms that have essentially generated these
transactions. But we don’t want to harm these
multi-sided platforms [platforms which facilitate transactions
without necessarily buying or selling anything themselves].
Actually, they has been a silent revolution with lots of
beneficial economic and social consequences.
So we are examining to what extent platforms can be enlisted
in VAT collection, and where best practices on that may fall.
There’s a broad spectrum there. It can go on the
one side from simple sharing of information for instance in the
context of audits, to the other side of the spectrum where
platforms would be given full tax liability.
That coincides with work at EU level, and with work in other
countries. That’s no coincidence, because at the
OECD we only look at what’s of consequence to
countries – so it’s normal that what we
do coincides with what jurisdictions are doing domestically. We
try to come up with answers that are consistent across
Probably early next year we’ll come up with the
new report, and an implementation package that will look at the
role of platforms in VAT collection.
That will also include a question on low-value imports,
which is very salient at the moment. In terms of low-value
goods, the main challenge is the administrative one.
For services, things depend very much from country to
country. You have countries that have systems that were not
designed to deal with cross-border services because 10, 20, 30
years ago those services weren’t happening.
So those countries have to change their legislation to
include place of taxation rules. That’s very much
what the Guidelines have done. The second piece there is that
once you have place of taxation rules, you have the power to
levy taxes, the next question is how you collect. Then
collection mechanisms come in, the registration-based taxation
collection mechanism where you require the non-resident seller
to register and remit the tax.
Essentially, that regime can work both for services and
goods. It’s what Australia will be implementing as
of next year. Their registration system that they have designed
for services in line with the Guidelines will also serve for
collecting and remitting the tax on goods transactions.
It’s also what the EU is planning to do going
So that’s what we’re looking at:
I’ve summarised it briefly but that’s
obviously pretty major reform. I expect to see a lot of that
going forward, especially if I look at the number of
expressions of interest we receive from countries.
ITR: What else do you see on the horizon, indirect
PB: What I see is a lot of countries
looking at technology, mainly to support enforcement, actually.
You're keeping track of those things too, of course: real-time
We have to be careful that not too much of the attention is
going purely to enforcement, that countries do not lose sight
of the fact that technology can also be used to facilitate
compliance in the first place. I'm not talking about any
On the one hand it's early days; on the other hand
everything in the digital economy evolves very quickly. I
haven't looked closely enough at what countries are doing
individually, but on the whole it's something that I see
A couple of countries in Latin America also in Asia have
been running invoice matching systems for a long time. Now we
see an increasing number of countries showing interest in those
systems. Also a number of service providers – tech
firms – reaching out to countries and offering their
services to countries to implement those sort of those sort of
ITR: Do you work with those private
PB: No. I just I just noticed that when
– as I said, I go out to countries very often
– and tax administrations quite often ask me for my
opinion on some of the service offerings they receive from
private firms. To be clear this is not outsourcing of tax
administration, it's purely technological.
The service offerings countries receive in that space are
evolving very, very rapidly, and increasingly in the direction
of technology that would support real-time reporting, real-time
online reporting, real-time online data matching.
For instance if you claim a refund, the refund claim is
immediately matched with the other side of the equation;
matched with the way the transaction that has generated the VAT
for which refund is now asked. Those kind of data matching
exercises we see are increasingly being offered to the tax
ITR: There’s another thing I'd like to
ask you about. We talk a lot about VAT and GST, but what do you
do around environmental taxes and the best practices for
PB: Well that's a colleague of mine, Kurt
van Dender, heading the department of environmental taxes unit.
They've been extremely active, notably in the COP 21 [Paris
climate agreement, see page XX] context etc.. Essentially they
sort of promote the usage of targeted taxation to promote
environmentally friendly policies.
That's an extremely important strand of work. I won't go
into further detail because I don't want to say anything that
is that that is incorrect. But they’re very busy
and it's exciting and extremely important work.
It’s also very politically sensitive.
ITR: What were you thinking as India introduced
PB: I'm impressed, and excited. It's huge
– have you ever been to India? What I didn't realize
before going to India with India was how diverse it is. For me
it looks even more challenging than the EU framework from a tax
policy perspective. So the fact that it's been able to agree on
a truly single tax system, first of all to reach a consensus
and then to implement it, it’s just amazing.
I was delighted to hear from our Indian colleagues that they
have relied heavily on the guidelines and on the work that
we've been doing, particularly in looking at how to deal with
cross-state or inter-state transactions.
ITR: I suppose it wouldn't be a tax interview if I
didn't drop a question on US tax reform?
PB: Last year we were talking about the
emerging idea of a destination-based cash flow tax. There has
been an awful lot of talk which has generated a lot of interest
in VAT mechanisms, also at the US level.
But what we now see is a reform focused on corporate income
taxes, personal income tax etc., so I've still been following
it of course, but probably with a little less professional
ITR: You’ve led this unit, the indirect
taxes unit, for a number of years now. How has your role
PB: In the beginning I had to spend a lot
of my time on nitty gritty technical stuff for very simple
reason that there was no one else. I've moved, or I'm trying to
move, to the sort of strategic level. I'm not there yet,
because we’re still a small operation so I
can’t avoid being very much involved in the
operational and technical work, but that's what I'm trying to
evolve towards, bit by bit. Let’s say
I’m half way!