Bringing a different perspective to the OECD

De Ruiter is committed to improving the OECD communicates about tax

A familiar face at the OECD, Marlies de Ruiter, the new head of the Tax Treaties, Transfer Pricing and Financial Transactions division in the CPTA felt immediately at home when she took up her post, despite a two-year break from the organisation spent at the Dutch Ministry of Finance. De Ruiter was the former chair or the Working Party No 6 (WP6), from 2007 to 2009, and, before that, she was the chairwoman of the Dispute Resolution Subgroup that successfully drafted the new arbitration provision and the new commentary to Article 26 of the Model Tax Convention.

De Ruiter was only two months into a new role as the director of OECD and EU tax policy at General Electric (GE) when she accepted the job at the OECD. As a policy person for the majority of her career, de Ruiter had never made a secret of her ambition to join the OECD as an official. Her career dates back to 1992, as a tax inspector for the Dutch Revenue, followed by posts in transfer pricing and policy-making in the Ministry of Finance before moving to the OECD's WP6. The two-month stint at GE was a disappointment to the company but de Ruiter said they were supportive in her choice.

"When the OECD made the offer it was quite unexpected," de Ruiter said. "I had to think about it but once I started thinking I realised it was the perfect opportunity from a personal perspective and it terms of the stage the OECD is at. It's a very interesting time to come in, with the changing economic environment, the global dialogue on international tax and all the challenging transfer pricing and treaty issues linked to these developments.

"Of course GE was not happy when I said I was leaving but they were also able to understand my decision and they were supportive, which was a big help in making my decision. It wasn't an easy decision because GE is also a great environment; it's a company that looks to the future and wants to help shape it. That's what appealed to me as a policy person. Having been at GE for two months I was still able to take away a lot of experience."

The OECD has shown its ability to hire personable and insightful people in the top tax positions but, with so many changes at the top, a number of tax practitioners have expressed concerns in the past that the continuity of the various projects, such as the WP6 Transfer Pricing Aspects of Intangible Assets, will be delayed.

"Continuity is important and has not been compromised: Joe Andrus (new head of the transfer pricing unit at the OECD) has been involved in the intangibles project and has been contributing to other key aspects of the transfer pricing agenda before he took on the role, Pascal Saint-Amans (director of the CTPA) has a lot of experience with the CTPA and I chaired WP6 for several years," de Ruiter said.

Mary Bennett, de Ruiter's predecessor, spent six years building the divisional head role and de Ruiter said Bennett's attention to detail smoothed the hand-over process for her.

"When I was chair of WP6 I worked with Mary Bennett very closely and I admire the work she has done, especially from a transfer pricing perspective. I know what her intentions and her ideas were so, for me, when I look at what Mary and Caroline Silberztein (former head of the OECD's transfer pricing unit) left they managed to take on some fundamental discussions, which they translated into relevant guidelines. That has really left the foundations for me to follow up. While Mary left in October, for me the time between then and me starting in February has not created any difficulties. Joe Andrus and Jacques Sasseville, the head of the tax treaty unit, have kept the process moving in the meantime."

De Ruiter's role encompasses tax treaties, transfer pricing and financial transactions but she says her primary focus will be on transfer pricing.

"Pascal Saint-Amans has indicated that transfer pricing is a top priority (see February edition of International Tax Review), which is not surprising considering the challenges transfer pricing issues pose for OECD member states, non OECD economies and multinational enterprises. I agree with him that it is important to simplify, to address the growing number of controversies and to do all we can to effectively eliminate double taxation."

The CTPA is doing a lot of transfer pricing work, with the work on intangibles and simplification by WP6, the first Global Forum on Transfer Pricing in March 2012, the Forum on Tax Administrations looking at transfer pricing from an administrative perspective and the importance of transfer pricing events in the OECD Global Relations Programme. As a result, de Ruiter expects the majority of her time to be consumed by transfer pricing issues.

Considering this, the roles of de Ruiter and Andrus have been clearly defined.

"[Andrus] has more technical experience than I do, I'm a policy person but he knows how to translate the wishes of policy into technical guidance. He is going to be the main driver of making that translation. I'm going to make sure the broader policies are sound and are adapted to the current environment."

De Ruiter's time with the Dutch Ministry of Finance has given her a macro-view of international economic organisations and she hopes to apply this experience to her new role.

"At the Ministry of Finance in the Netherlands I moved to the customs side. That was really interesting for me and gave me a perspective of how other international organisations work, like the World Customs Organisation and the European Commission.

"It provided a different perspective on what goes on in the world and on what the priorities are of other organisations and their members. It allowed me to look at global issues from the perspective of another organisation and I have taken that with me. I think this will be especially helpful in the dialogue with non-OECD economies and other international organisations."

In addition to tax policy, OECD officials are increasingly fielding criticism from non-government agencies, particularly in relation to the organisation's involvement with developing countries. De Ruiter believes the more organisations – and therefore more resources – working towards the same end, the better.

The OECD has been critised in the past, by organisations such as ActionAid, for its efforts to include developing countries in its transfer pricing guidelines. Critics believe that its global forum on transfer pricing will detract from the work the UN is doing to simplify the transfer pricing guidelines for developing countries.

De Ruiter says the two organisations, and any others that work to improve the tax systems of the world's poorer countries, are fulfilling different roles with the same aim and it is important to forge partnerships and listen to each other.

"I think the UN is doing something different from the simplification exercise we are undertaking. We are trying to look at different specific areas in transfer pricing where administrative burdens can be lowered."

The OECD is placing more emphasis on case studies like management services to create easier, or more streamlined, ways to apply the transfer pricing guidelines to those case studies. "This will surely benefit developing economies, but also the tax administrations of OECD economies and multinationals," said de Ruiter.

De Ruiter thinks the OECD has a broader, more general aim towards transfer pricing in developing countries in terms of simplification but is more targeted in terms of specific issues. In contrast, the UN is developing a manual to translate the existing guidance to something practical for developing countries.

The new division head says it is always difficult when dealing with criticism from NGOs, "both sides are always saying "yes, but"". However, she agrees with Saint-Amans who said: "There is no turf here, we should converge and make sure we deliver at the best cost."

"We are all facing global tax questions that need to be dealt with from a global perspective," says de Ruiter. "We all have limited resources and each of us has a reason to be as efficient as possible so partnership with other organisations and other non-OECD countries [is positive]. It's important to listen to each other," said de Ruiter who added that, until she has had a proper dialogue with the NGOs it will be difficult to create a model of understanding.

"Of course, the UN is a very important global organisation, aimed at helping developing countries and poorer economies," said de Ruiter. "For that reason, I think they are a relevant partner to look to when talking about tax and development."

De Ruiter has relatively long-term ambitions for her new role, allowing the OECD to breathe a sigh of relief Source: OECD

De Ruiter has relatively long-term ambitions for her new role. But, the organisation still faces challenges and part of de Ruiter's role will be to face these.

Communication from within the organisation, and how the OECD communicates its message to the world, is something that needs constant attention.

"If you look at the aim of the OECD – preventing or avoiding double taxation – the challenge is in evolving the climate of shared solutions, even though countries come from different positions given the differences in their domestic legislation and the different economical circumstances they are in. Everybody agrees with the same goal, there are just differences of opinion on how to get there. That is the biggest challenge. We need commitment, dialogue and partnership between myself, the department and other divisions but also between member countries and non-members. The challenge is to make sure this is in place and work to this aim. Internally, building a team together with all the people in my division and horizontal projects within the CTPA to create convergence on all transfer activities we perform, are going to be key."

When Mary Bennett left in October 2011, she told International Tax Review her biggest regret on departure was in not perfecting the organisation's communication, especially concerning its work with developing countries.

But, de Ruiter says Bennett was working during a difficult time for the OECD: "Mary did a great job in laying the foundations at a time when there were very important and sensitive issues, like business restructuring, which needed a thorough discussion before any communication could be put out. Mary and Caroline laid the foundations and those issues are out of the way now and communication will be easier than when Mary was here.

"Besides that, the OECD is already doing a lot to facilitate a global dialogue on tax and to solicit involvement of non-OECD economies. But of course this is not the only activity; there are a lot of other activities undertaken by the OECD to facilitate dialogue and sharing of experiences. I agree with Mary that the next step should be to make sure the communication by the OECD online is more targeted at different users, such as developing countries."

Everyone involved with the OECD has different priorities when it comes to the next project to follow the WP6 on intangibles. Following de Ruiter's previous work, dispute resolution, in some capacity, is on the cards.

"I have been very involved with the earlier dispute resolution project and I have always been very proud of the work put out by the OECD. There are still some very important policy and implementation issues out there and that's why I am very happy there is going to be a follow up dispute resolution project where I will be involved. I am also very in favour of the work on simplification.

"A lot of dispute cases are based on transfer pricing but the new project would look at the broader issue of dispute resolution in tax. One big question is implementation of guidance and arbitration in treaties and in the day to day work of competent authorities. This topic was the main subject of an OECD roundtable in January. The roundtable showed that competent authorities, business and non-OECD countries also think it is an important issue so there is a broad support. The follow up of this roundtable will be that the OECD is going to organise a global forum on dispute resolution."

De Ruiter is committed to improving the OECD's communication efforts and is open to establishing productive dialogues with her staff and with her critics. It is something she is keen to establish among her team and she sees it as a clear priority, considering the level of complex projects the OECD is involved in.

She joined the organisation in time to see the deadline pass for comments on permanent establishment and between now and 2014 she will be working towards an update of the Model Tax Convention but it is clear she has the requisite support among her team and her colleagues to deal with the upcoming projects.

At this point in her OECD career, tax practitioners can be assured the organisation has taken on a committed and experienced policy person and with deadlines for projects, such as a first draft of the transfer pricing aspects of intangibles in 2013, quickly approaching, they will soon be able to judge for themselves.