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Piet Battiau

Piet Battiau is arguably the most influential person in the world of indirect tax. See a lengthened version of his magazine interview here.

Piet Battiau

Piet Battiau is a new entry this year
Piet Battiau was also in the Global Tax 50 2016, 2015, 2014, 2013, and 2012

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 time.

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 and support.

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 countries?

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 package we 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 out there!

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 economy?

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 sales.

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 borders.

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 forward.

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 tax-wise?

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 reporting.

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 individual country.

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 evolving rapidly.

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 systems.

ITR: Do you work with those private companies?

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 administrations.

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 them?

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 GST?

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 interest.

ITR: You’ve led this unit, the indirect taxes unit, for a number of years now. How has your role evolved?

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! 

The Global Tax 50 2017

View the full list and introduction

The top 10 • Ranked in order of influence

1. US Tax Reform Big 6

2. Dawn of the robots

3. The breakdown of global consensus

4. The fifth estate

5. Margrethe Vestager

6. Arun Jaitley

7. Sri Mulyani Indrawati

8. Pascal Saint-Amans and Achim Pross

9. Richard Murphy

10. Cristiano Ronaldo and Lionel Messi

The remaining 40 • In alphabetic order

Tomas Balco

Piet Battiau

Monica Bhatia


Rasmus Corlin Christensen

Seamus Coffey

Jeremy Corbyn

Rufino de la Rosa

Fabio De Masi

The Estonian presidency of the Council of the European Union

Maria Teresa Fabregas Fernandez

The fat tax

Maya Forstater

Babatunde Fowler

The GE/PwC outsourcing deal

The Gulf Cooperation Council (GCC)

International Consortium of Investigative Journalists (ICIJ)

Meg Hillier

Chris Jordan

Wang Jun

James Karanja

Bruno Le Maire

John Pombe Joseph Magufuli

Cecilia Malmström

The Maltese presidency of the EU Council

Paige Marvel

Theresa May

Angela Merkel

Narendra Modi

Pierre Moscovici

The European Parliament Committee of Inquiry into Money Laundering, Tax Avoidance and Tax Evasion (PANA)

The Paris Agreement

Grace Perez-Navarro

Alexandra Readhead

Heather Self


Tax Justice Network

Donald Trump

United Nations Committee of Experts on International Cooperation in Tax Matters

WU Global Tax Policy Center

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