Global Tax 50 2014: Pascal Saint-Amans
Director, OECD Centre for Tax Policy and Administration
The OECD's CTPA is the go-to body when it comes to international tax matters, hence the centre's inclusion in this year's list. And as its director, it is no surprise that Pascal Saint-Amans retains his place in the top 10 of our Global Tax 50, a position he has held since 2012 – the year in which he replaced Jeffrey Owensas CTPA director. The Frenchman discusses a hectic, but productive, year with International Tax Review's Matthew Gilleard.
International Tax Review: When the BEPS project was announced, it's fair to say many were sceptical of your chances of meeting such ambitious deadlines. Are you proud of the BEPS team's achievements in delivering on the 2014 action items?
Pascal Saint-Amans: I think we're pretty happy that we were able to deliver on time, and more importantly than being on time, what we have delivered is real substance.
We are pleased with the comments in the tax press that this was real and not stuff just to say "we are meeting the deadlines" when actually what was produced was watered down. We haven't watered anything down. On the contrary, some is more ambitious than we initially thought, like the minimum standard on treaty abuse, or the content of thecountry-by-country reporting (CbCR)is, I think significant and very ambitious and, more holistically, I would say that I'm very impressed by the commitment of the countries involved, including the new ones.
But as for being proud or happy, let's leave that until the end of 2015. We have to complete the action plan, so we are only at halfway.
ITR: Finding consensus on tax issues is notoriously difficult. By increasing engagement with developing countries – an area the OECD has been criticised over in the past – you have made this task even harder. Are you pleased with the levels of engagement you have promoted?
PSA: We can do better. We try to do better. It's a real challenge.
I'm sometimes a bit frustrated by comments saying "you're not achieving anything because developing countries are not on an equal footing", which I think is a bit unfair because what is being done will have very positive spillover effects on developing countries and everybody knows that.
But, that said, I do think that we need to do better. And that's why we will now, in the second phase, better include developing countries, move more institutionally in terms of having these regional networks, better acknowledge the specific needs of developing countries and better work with the other international organisations under the G20 umbrella, and outside of the G20 umbrella. So we need to do better there, but we are firmly engaged to do that.
We had to absorb the G20 non-OECD countries, eight of them plus Colombia, which is an accession country to the OECD. What is amazing is that we have done that in one year and I think we have very, very good levels of involvement in terms of input, in terms of engagement, and we now need to be successful in the way we are engaging developing countries and recognising – and that's the difficulty – that it's a large constituency, it's not a homogenous one, and countries are sovereign, so you can't have one country speaking on behalf of others. It's a big challenge, but it's part of what we have to address.
ITR: What are your views on the role that other multilateral bodies such as the IMF and UN Tax Committee play, or could play, in international taxation?
PSA: One of the things I am proud of – to use that word that I don't like much otherwise – is to have the UN observer to the committee on fiscal affairs (CFA). That's the first thing I did when I started as director; I got that done and I'm extremely happy that we're having a good relationship. We're not just talking about one committee, but the UN as a whole; the UN is more complex and much richer than just one committee, even though the [UN Tax] committee is extremely relevant for the work we're doing. So the UN has a key role to play in voicing the concerns of developing countries, and the UN is very present with that extra focus, present in most of our meetings.
We do think that the IMF and the World Bank have a key role to playin the tax policy analysis for the IMF, in capacity building for the IMF and the World Bank and we are very glad to work with them on all that through the G20 development working group. But the regional tax organisations are growing and are playing a more important role, and that's very good. We have many projects with CIAT, with ATAF, and we are accompanying the Australians, the Singaporeans the Koreans and others to try to grow SGATAR. So international tax has never been higher on the agenda, because there is a need for cooperation and having all these bodies working together, and I think we are working all together in a pretty sensible manner.
ITR: Looking ahead to 2015, now. We know we are only halfway through the BEPS project and much work lies ahead. What is going to be the biggest challenge next year?
PSA: Everything is a challenge. Whatever way you formulate that question, the answer is that everything is a big challenge.
Ensuring the implementation of the 2014 measures, such as the implementation of country-by-country reporting, is a big challenge. On the 2015 deliverables, I mean, you can take them all. CFC – extremely difficult. You take the interest deductibility – extremely difficult. You take the definition of the permanent establishment – extremely difficult. You move to the hardcore aspects of transfer pricing and risk recharacterisation – extremely difficult. You take the mutual agreement procedure, countries are very nervous about their sovereignty and are reluctant to make progress and we badly need to make progress there – it's extremely difficult. Developing a multilateral convention – wow, what a challenge. But we are moving there. So I'm not sure I would single one out. Action 11, tax policy analysis, how can we get a better intelligence of the dynamic of corporate income tax in a globalised environment – extremely difficult, extremely interesting, and extremely challenging.
So there's not a single one that is not difficult. And I would like to add another one: the post-BEPS environment. How do you ensure countries move in a manner which will not disrupt investments, which will be coordinated, where there is some form of, if not monitoring, at least understanding of what is going on so that we don't, as we did in the past, issue recommendations and nobody is watching what happens to it. There have been commitments, so how do these translate into fact? What's the impact on double non-taxation and double taxation? So that's another challenge that is ahead of us.
ITR: To what extent does unilateral action to implement anti-base erosion measures hinder your work to find global solutions? Do national measures along these lines concern you?
PSA: The answer is yes, we are concerned. And that's why we have launched the BEPS action plan, because countries were about to move in on their own and we helped all the countries to move in a coordinated manner. Probably not good enough, but probably better than the OECD not doing anything for the past two years. What would have happened? I don't know, that's speculation. But assuming that we would have pretended everything is fine and the rules work perfectly, I'm not sure we would be in the position where you have 44 countries around the table trying to negotiate and commit to doing things – but that is speculation.
ITR: What lies in store for Pascal Saint-Amans post-BEPS? Have you had a chance to think that far ahead?
PSA: Going surfing, going out with family, a real life. No, I'm kidding. We have touched on the reality. It's about ensuring that countries which have committed to a number of things move in a consistent manner so that we delete the frictions and we don't end up with double taxation. I think the key is that we ensure we have a better regulated environment in the form of tax regulation that we are promoting.
ITR: What is the overriding message you want to pass on to the tax world right now?
PSA: We are working hard to get an international tax framework which will be more sustainable because it will eliminate double taxation more sustainably, more globally and it will not create opportunities for double non-taxation, so I think that's what we're working hard on. And it's difficult. We understand that the world is in transition and there is more uncertainty, which is unpleasant for investors, but on the other hand if we don't try to bring that form of regulation, the uncertainty will not go away. Or if it goes away it will be at the cost of double or multiple taxation, so we're just trying to do the right thing in an extremely difficult and challenging environment.
The Global Tax 50 2014
Gold tier (ranked in order of influence)
Silver tier (in alphabetic order)
Joaquín Almunia • Apple • Justice Patrick Boyle • CTPA • Joe Hockey • IMF • Arun Jaitley • Marius Kohl • Tizhong Liao • Kosie Louw • Pierre Moscovici • Michael Noonan • Wolfgang Schäuble • Algirdas Šemeta • Robert Stack
Bronze tier (in alphabetic order)
Shinzo Abe • Alberto Arenas • Piet Battiau • Monica Bhatia • Bitcoin • Bono • Warren Buffett • ECJ Translators • Eurodad • Hungarian protestors • Indian Special Investigation Team (SIT) • Chris Jordan • Armando Lara Yaffar • McKesson • Patrick Odier • OECD printing facilities • Pier Carlo Padoan • Mariano Rajoy • Najib Razak • Alex Salmond • Skandia • Tax Justice Network • Edward Troup • Margrethe Vestager • Heinz Zourek