The leaders creating an impact around the world
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The leaders creating an impact around the world


Welcome to International Tax Review’s second annual selection of the Global Tax 50, the individuals and organisations we believe have made a substantial impact on tax practice and administration in the last 12 months.

UPDATE: a more recent version of the Global Tax 50 is available.


Many are tax professionals whose job is to develop or implement tax policy; others, such as the presidents of Chile and France are above that fray, but have still left their mark on tax in their jurisdiction or further afield this year.

Some of the organisations on the list are ad hoc groups, who have come together to campaign for, debate or work on one narrowly defined issue. They may be around in 12 months or they may not. It depends if they continue to have influence.

The list contains a number of selections who were not on the first list a year ago. We did not intend to construct an entirely new list, but we hope you will see from our choices that the tax landscape is one that is always changing.

The 50 are in alphabetical order. They are personal choices of the editorial staff of International Tax Review. There were no criteria apart from the need for the selection to have had a recognisable impact. The only exclusion zone we put up was around private practitioners as we felt it would be impossible to distinguish whether one accountant, adviser or lawyer was more important than another.

Please tell us if you agree or disagree with any or all of the names on the list. And, of course, if you think you should be on next year's list, make sure you tell us that, too.

View the top 10 list

Richard Allen

Joe Andrus

Carlos Alberto Freitas Barreto

Piet Battiau

Max Baucus

Monica Bhatia

Arvin Boolell

Dave Camp

Paul Caron

Palaniappan Chidambaram

John Christensen & Richard Murphy

World Customs Organisation

Rudolf Elmer

Brian Ernewein

David Gauke

Global Tax Advocacy Taskforce, TEI

Connie Hedegaard

François Hollande

Sarosh Homi Kapadia

Philip Kermode

Advocate General Kokott

Chris Lenon

Carl Levin

Oupa Magashula

Sam Maruca

Sanjay Kumar Mishra

John Mitchell

Will Morris

Chris Needham

Occupy & Uncut

Alexey Overchuk

PACE Coalition

Sebastián Piñera

Michael Plowgian

RATE Coalition, US

Marshall Rothstein

Paul Ryan

Pascal Saint-Amans

Nicolas Sarkozy

Algirdas Semeta

Dan Shaviro

Lee Sheppard

Nicholas Shaxson

Parthasarathi Shome

Stig Sollund

Sir Martin Sorrell

Wayne Swan

Richard Stern


Sir Andrew Whitty

Richard Allen

Founder, Retailers Against VAT Avoidance Schemes

Not many hippies go on to become one of the most influential people in the world of tax. Richard Allen started out promoting psychedelic music through his label, Delerium Records, and became famous among fans for discovering and managing the band Porcupine Tree. He ran The Freak Emporium, a pioneering internet mail order businesses selling collectible music genres, but was forced to shut it down as his business was being undercut by the pricing strategies of large retailers who availed of low value consignment relief (LVCR) by fulfilling sales through the Channel Islands.

This allowed them to avoid the VAT Allen and other onshore companies were required to pay.

A confrontation with an uninterested HMRC turned Allen into a tax campaigner. His experience of the complex and "equally devious" legalities of the music industry were an ideal schooling and soon he had banded together with companies from a range of sectors facing similar problems to found Retailers Against VAT Avoidance Schemes.

"In a single market reliant on fiscal neutrality, VAT avoidance is not and cannot be a legitimate business opportunity," says Allen. "It's nothing more than a parasitic arrangement exploiting a tax system and preying on the businesses of those traders unable to avoid it. In simple terms it's cheating."

Allen's biggest success came this year when, after successfully lobbying the European Commission to take action, the UK was forced to remove LVCR on mail order goods from the Channel Islands.

But as Allen uncovered evidence of companies using Spain, Belgium and Germany to circumvent the UK's removal of LVCR, the real challenge for him lies ahead as he attempts to level the playing field for all businesses across the EU.

"The battle that RAVAS fought in the Channel Islands is now moving into the rest of the EU," Allen says. "We have identified further abuses and national legislation that is not compliant with EU law and will be submitting a detailed complaint to the Commission shortly. We are hopeful it will result in firstly the clarification of existing LVCR legislation – which is widely misunderstood – and secondly a much more aggressive stance on VAT avoidance from the Commission."

Fun fact: Despite Allen's business acumen and solid grasp of EU VAT law, he received an E grade in his final economics exam before he left school. He said to the teacher that the assumption that all consumers were fully informed of prices in the market was ridiculous, but was told: "We're here to learn it, not question it, Allen".

Channel Islands retailers and EU governments will be wishing he had listened to that advice.

Joe Andrus

Head of the transfer pricing unit at the OECD

Joe Andrus is the head of the transfer pricing unit at the OECD. It has been a busy year for the him and his staff, with a number of draft reports released by them and Working Party No 6 including on the transfer pricing aspects of intangibles, timing issues and safe harbours.

Andrus will be analysing comments from taxpayers, industry organisations and tax advisers from across the world on all three projects; a big job for one man considering the level of interest in the reports. The working party surprised professionals in June this year by releasing a draft on intangibles well-ahead of schedule. "The OECD has been gratified to receive nearly eighty comment letters related to the discussion draft on intangibles, totaling more than 900 pages of text," says Andrus. "It has also received many comment letters on its discussion draft on safe harbours and the Secretariat's request for comments on timing issues."

"Delegates to OECD Working Party No 6 will consider the comments in the period before its November 2012 meeting and look forward to an open and candid discussion with interested attendees at its November 12 to 14 public consultation on the matters raised in the comment letters," Andrus adds.

The OECD official joined the OECD in October 2011, after the departure of Caroline Silberztein who started the intangibles project.

Andrus said he appreciates the recognition International Tax Review's Global Tax 50 gives to the work of the OECD in transfer pricing.

Carlos Alberto Freitas Barreto

Secretary of the Federal Revenue of Brazil

As the head of Brazil's tax administration, the Federal Revenue of Brazil (RFB), Carlos Alberto Freitas Barreto is a man whose actions are closely monitored by multinationals' tax departments.

The RFB plays a key role in the development and implementation of the country's international tax framework and is responsible for applying the country's much maligned controlled foreign company (CFC) and transfer pricing rules.

The biggest reform Barreto has overseen since his appointment in January 2011, are the severe changes to Brazil's transfer pricing rules which take effect at the beginning of next year.

The new rules alter the way in which taxpayers may calculate benchmark transfer prices, particularly affecting the most commonly used calculation methods for import transactions.

If the RFB is strict in its application of such rules, it could have a considerable negative impact on multinationals operating in Brazil.

Barreto is a seasoned revenue official, having first joined the administration in 1978.

Before becoming RFB secretary, he was president of the Fiscal Resources Administrative Council of the Ministry of Finance of Brazil in 2010; deputy secretary of the RFB from 2002 to 2009; and head of the Offices of the Delegation of Federal Revenues of Brazil and of the Judgment Delegation in Salvador, Bahia.

Piet Battiau

Head of consumption taxes, OECD Centre for Tax Policy and Administration

For a long time, the OECD's work on VAT has lagged behind its projects in other areas of tax such as transfer pricing and exchange of information. But two linked developments in the last year have catapulted indirect tax to the fore and Piet Battiau, head of consumption taxes, on to this list.

The OECD is attempting to deal with a number of challenges thrown up by formulating VAT policy in an increasingly globalised world.

"The absence of an internationally agreed framework leads to an increased risk of double or multiple taxation or, in the inverse case, double or multiple non-taxation," says Battiau. "The most common reasons for double taxation and unintentional non-taxation are the use of different rules to determine the place of taxation and different interpretation of similar rules, different characterisation of transactions and difficulties to recover VAT that was incurred abroad."

Battiau has spent the past year leading a project to devise a new set of guidelines for VAT, following on from the OECD's work on transfer pricing guidelines, and establishing a Global Forum on VAT. Progress on both has come on apace with the first meeting of the Forum taking place this month, bringing together around 90 countries from the OECD and beyond to share best practices.

Meanwhile, the guidelines are coming together well and the OECD wants to publish work on the allocation of taxing rights and neutrality in January.

"We want to assist countries with the design of their domestic VAT systems," says Battiau. "Many are looking increasingly to VAT after the crisis, with corporate and personal income tax revenue down."

There are those who accuse the OECD of being a rich man's club, increasingly out of touch with the needs of developing nations, but its ability to wield influence on tax policy remains strong and as its work on VAT steps up a gear, Battiau's own influence will continue to grow.

Max Baucus

Chairman, Senate Finance Committee

By virtue of his position, Max Baucus has carried considerable influence on tax this year.

The thrust of the work of the chairman of the US Senate Finance Committee this year has been to create a consensus around a plan for an overhaul of the Internal Revenue Code that taxpayers, law makers, academics and officials say is long overdue.

The speculation suggests that the round of committee hearings and formal and informal communications he has been having with interested parties is bringing him closer to forming a common view about what should be done.

Baucus is in his third stint as chairman of the Senate's tax-writing committee. He first took the post for a little under three weeks in January 2001 and came back for his second spell in the post in June of that year, lasting until November 2002. His third period as Senate Finance Committee chairman began on January 4 2007.

Finance Committee hearings on tax reform got under way in earnest in June 2011, when Baucus convened one on ideas for changing the Internal Revenue Code. Since then, sessions have been held on the effects of tax reform on the treatment of capital gains, the taxation of business entities, the impact on US energy policy, incentives for capital investment and manufacturing, and the tax treatment of financial products.

It is clear Baucus and his committee are taking seriously the task of producing legislation that has a chance of getting passed in the Senate and approved by the President.

As long as the Democrats retain control of the Senate after November's elections, Baucus will get the chance to try to get any legislation onto the statute book. It will be a crowning glory for his career.

Monica Bhatia

Head of secretariat, OECD Global Forum on Transparency and Exchange of Information for Tax Purposes

When Pascal Saint-Amans took up the top job at the OECD, Monica Bhatia stepped into his old shoes at the Global Forum and stepped onto this list.

Tax justice activists are critical that its standard of tax information exchange agreements (TIEAs) and peer reviews is too weak (there are no longer any tax havens on its black list), but the lobal Forum's work is widely seen as the gold standard of tax transparency and since 2009, the number of TIEAs has exploded.

Bhatia spent the last two decades working for the Indian Revenue Service. Her appointment shows that the OECD is committed to reaching out to emerging and developing countries.

"In my 21 years of experience in the Indian Revenue Service, I have played different roles; that of a tax auditor, of a departmental representative in the tax tribunals, a policy maker, a negotiator of tax treaties and an official in the Exchange of Information (EOI) unit," says Bhatia. "In each of these roles, I realised the importance of effective exchange of information in enforcement of my domestic tax laws. In particular as part of the EOI unit, I saw firsthand the practical difficulties that we faced in obtaining timely and correct information from our treaty partners."

Bhatia's new role puts her at the cliff face of efforts to improve transparency. The Global Forum is approaching the end of the phase one peer reviews, which examine the legal and regulatory framework to facilitate information exchange. It is now launching its phase two peer reviews which evaluate each jurisdiction's compliance with the standard in practice.

"You cannot administer a tax system effectively, never mind exchange information with treaty partners, if you don't know who owns business enterprises in your jurisdiction and how much they are making or if you cannot access information on bank accounts," says Bhatia. "You just end up creating onshore tax havens. Transparency is necessary to exchange information effectively, but more importantly it's necessary if you expect to be able to enforce your own laws."

Arvin Boolell

Minister of Foreign Affairs, Mauritius

The India-Mauritius tax treaty has been a controversial issue for many years. More than one-third of foreign direct investment into India is routed via Mauritius, and the Indian authorities have repeatedly tried and failed to enter into a renegotiation of the terms of the double tax treaty, particularly in the last five or six years. A key facet of the treaty's terms is a capital gains tax exemption, which means the Indian authorities forgo substantial amounts of tax revenue.

In July this year, however, Mauritius' Foreign Minister Boolell showed the first signs of willingness from Mauritius about possible renegotiation, though he described the capital gains tax provision as "sacrosanct".

"Our discussions with India on the India-Mauritius double taxation avoidance treaty are aligned to this objective [of strengthening the nation's reputation as a trustworthy place to do business]," says Boolell. "Over the years, Mauritius has taken several steps to address concerns raised by India and we will continue to do so in line with international best practices."

If renegotiation were to go ahead, then given the volume of traffic into India through Mauritius, it would have dramatic implications for foreign investment and for the economy of the island. With that in mind, Boolell recognised the position of influence that he found himself in and set out his stall by saying that provisions which would harm the Mauritius economy would be unacceptable.

"We have come up with a panoply of measures to be more responsive to India's concerns," says Boolell. "But the objective is not to kill the global business community. We want certainty to be brought back. Nothing should be done to harm the financial interests of Mauritius."

Boolell's comments indicate that he is not willing to be bullied into an agreement by his Indian counterparts. This is a pragmatic approach, and one that is backed up by the minister's claims that there has been effective exchange of information between the two countries on 170 cases over the last three years – some of which were even outside the framework of the double taxation avoidance agreement.

However, with taxpayers and their advisers fearing the uncertainty that a renegotiated treaty would bring, it is still doubtful as to whether one will materialise. Whatever happens, though, Boolell will be influential in determining the outcome of any future discussions, and therefore in determining the future for many multinational taxpayers investing into India.

"The Mauritius financial centre remains a preferred jurisdiction for the international investor community to structure investments into India and is increasingly being used by Indian businessmen and others to conduct business with Africa," says Boolell.

Dave Camp

Chairman of the House Committee on Ways and Means

Camp David is synonymous in the US with hosting international dignitaries while David (Dave) Camp is a name now heavily associated with international tax policy.

Camp was appointed chairman of the House Ways and Means Committee – one of the oldest and most powerful committees in the US House of Representatives – in 2011.

As the head of one of Congress's two tax-writing committees – Senate Finance is the other – Camp is one of the most influential policymakers in Washington.

Two of Camp's signature issues have been about making the US more competitive by lowering and simplifying tax rates for individuals, families and employers; and promoting the production and use of alternative energy.

Camp is a strong proponent of the R&D tax credit, and has worked closely with Sander Levin, the ranking Democrat on the Committee, to ensure companies have an incentive to invest in R&D in the US.

He is also a key figure in attempting to move the US away from its somewhat archaic system, compared to other jurisdictions, of worldwide taxation.

At the end of 2011, Camp released his draft legislation to change the US from a worldwide to a territorial system of taxation as part of comprehensive reform that also envisions lowering the top tax rate to 25% for corporate and individual taxpayers.

"While overhauling our outdated tax code is an ambitious goal, it is also necessary to make America a more attractive place to invest and hire," said Camp.

"Having both the highest corporate tax rate in the industrialised world and an outdated worldwide system of taxation makes America less not more competitive in the global marketplace. The House is serious about creating a climate for job creation and transitioning to a territorial system is a critical component of comprehensive tax reform," he added.

Paul Caron

University of Cincinnati Tax Professor, Taxprof blogger

Paul Caron started out as a legal academic, which he still is, but is as well known now as the author of the TaxProf blog, which he launched on April 15 2004.

The TaxProf blog had 700,000 page views in its first year, it has between 3.5 million and 4 million now. Everyday Caron picks news and information for and about tax professors, such as their latest lectures and articles, notice of pieces about tax in the specialist and general media; signposts to academic conferences and events held by think-tanks, as well as statistics about the best law schools and the most downloaded academic articles.

Caron traces the origin of the blog back to his interest, when he first became a professor in the early nineties, in the effect technology was beginning to have on legal education. He then went to start an e-mail listserv – "about the only email list that has worked" – a closed list of about 400 US and overseas tax academics, before going on to edit tax journals on the online SSRN (Social Science Research Network).

"I know my obituary will refer to my blog and not to any of the articles or books I have written," he says.

The success of the blog means Caron is in demand for his views on the tax topics of the day. He says he gets calls almost every week from reporters: "I just don't have time to respond to everything." It has also meant more professional opportunities in the shape of symposia and seminar invitations. "The blog gives me some credibility," says Caron. "More and more students are engaged technologically.

A benefit of doing the blog is the type of people it brings Caron into contact with. "The job has got easier. One-third of my contact comes over the blog and people sending me stuff. It makes me blog much better. People from the Department of Justice, the Hill and the Tax Court send me content, though not for attribution.

As for the future of the blog, Caron said he had a plan to ask others to contribute to ease the burden, but that he has not done that yet.

"For better or worse, it's my baby and reflects the editorial decisions I make."

Palaniappan Chidambaram

Minister of Finance, India

When Chidambaram took over from Pranab Mukherjee as finance minister in July, he was no stranger to the position, having previously served in the role on two separate occasions. That is not to say, though, that Chidambaram had an easy job on his hands. In the first few months of his third stint as finance minister, Chidambaram has taken the lead on a whole host of pressing issues. He has commissioned fellow Top 50 member Parthasarathi Shome to lead an expert committee looking into two issues: the validity and appropriateness of the retroactive legislative amendment on indirect transfers and the suitability of an Indian general anti-avoidance rule (GAAR). And he has also raised the question as to whether the Direct Taxes Code (DTC) is in need of a rethink. Most of these issues are yet to be resolved, so Chidambaram's influence will increase further over the course of the coming months.

International Tax Review: What do you consider to be your biggest achievement in, or influence on, taxation?

Palaniappan Chidambaram: Two things come to mind immediately. The first is the new income tax slabs that I had implemented in the 1997-1998 budget. The three rates of 10%, 20% and 30% for individuals and the rate of 30% for corporates have, much to my surprise, survived several governments and three finance ministers! The other big achievement was the introduction of VAT in 2004-2005.

ITR: What is your number one priority from a business taxation point of view at the moment?

PC: My priority in terms of business taxation is to have a stable tax regime, a non-adversarial tax administration and a fair and just dispute-settlement machinery.

ITR: You have said that the DTC needs a "fresh look". Can you expand on this? How are things progressing?

PC: The DTC needs a fresh look for no reason other than that there are several versions of the DTC. We need to remind ourselves of the original objectives of the DTC. I had said then – and I would like to say it again now – that the objective is not to amend the Income Tax Act, 1961, which has already been amended hundreds of times. The objective is to write a new Direct Taxes Code. Things are progressing, a bit slowly for my comfort, but I intend to quicken the exercise.

ITR: Are you able to give an update on the possible renegotiation of the India-Mauritius tax treaty?

PC: I am unable to give a date or a timeline. There are too many factors at play – taxation, friendly relations, diplomacy and, now, the slowdown in the world economy. But I would like to make progress on the matter and trying to find a suitable mechanism or opportunity for that purpose.

ITR: The GST seems to have hit a roadblock with opposition from various states. What is the road forward for GST implementation?

PC: I do not think that GST has hit a roadblock. The finance ministers of the states have visited several countries and, I am told, have come back with the impression that wherever it has been implemented, GST has been a success. I think all are on board on the issue that GST must be implemented. There are some legal and practical issues that have to be sorted out and I am confident that we would be able to do so during the forthcoming discussions between the Government of India and the chairman of the Empowered Committee, Shri Sushil K Modi, followed by discussions with the Empowered Committee as a whole.

ITR: You have been responsible for rationalising the tax rates in the past and it has resulted in increased compliance and an increase in collections. Is there any likelihood of further lowering the rates to the proposed DTC level?

PC: I cannot comment on proposed tax rates. Tax rates are determined after taking into account the economic situation at any given time. While tax rates must indeed be reasonable, we must keep in mind that a developing country needs revenues.

John Christensen & Richard Murphy

Tax Justice Network

The Tax Justice Network's influence on efforts to increase transparency is growing by the year.

Over a decade ago, a concerned activist met with an accountant and asked him how companies could be made to pay the tax they owe in each country in which they operate. With Richard Murphy's answer to John Christensen, the idea of country-by-country reporting (CBCR) was born.

Back then, it might have been difficult to imagine activists such as Christensen or Murphy appearing on this list, consigned as discussions around tax justice and transparency were to development agencies and non-governmental organisations.

But the financial turmoil since 2008 has changed everything. Now limited forms of CBCR are finding their way into EU and US legislation, it has won approval from the World Bank, and its base elements underpin the work of the Extractive Industries Transparency Initiative, under which companies should commit to report what they pay to governments, governments should publish what they receive and the information should be made available to the public so they can hold both to account.

Holding corporations and governments to account has been the core of Christensen and Murphy's decade-long mission to tackle tax avoidance and the tax havens that facilitate it.

One particular success Christensen points to in the last year is the OECD's acceptance that automatic, rather than by request, information exchange processes provide the effective standard for tackling tax evasion.

While Christensen spearheads the Tax Justice Network's campaigning, from the deck of his daily blog Murphy's slightly looser cannon shoots down multinational companies he believes are paying less than their fair share of tax.

Corporations remain at best sceptical and at worst hostile to the Tax Justice Network's goals, but the tide appears to be changing. As long as Christensen and Murphy are swimming ahead of it, they will remain significant influences in world tax.

World Customs Organisation

Kunio Mikuriya, Secretary General

The time for more effective coordination between transfer pricing and Customs valuation has arrived.

It has long been accepted that a close relationship exists between transfer prices and Customs valuation. However, it is only in the last few years that the pace of cooperation has quickened between the international organisations responsible for leading policy development in each area.

Different parts of the same multinational may have agreed on what one should pay for a product it needs from the other, but what happens at a border. Will the price be accepted? What upward or downward adjustment will Customs require? How will that be reconciled at a later date?

"We are discussing with the OECD consistency in experience between transfer pricing and customs valuation," says Kunio Mikuriya, the secretary general of the World Customs Organisation (WCO), the only intergovernmental customs organisation, which deals with areas such as the development of global standards, the simplification and harmonisation of Customs procedures and the facilitation of international trade.

The WCO has clearly got priorities for cooperation. It already participates in the work of the African Tax Administration Forum and works closely with CIAT, the Inter-American Center of Tax Administrations. It has observer status in the OECD-run Global Forum on Tax Transparency and Exchange of Information. The organisation is also holding two events with the OECD in 2013 looking at the coordination of transfer pricing and customs valuation policies.

"Revenue collection is the most important thing in customs," says Mikuriya, so we try to ensure fair and efficient tax collection. I hope that is the goal of revenue collectors as well. We have developed a package of tools and best practices about how to achieve this."

The secretary general argues that customs and tax both help the economy: "Customs contributes economic development through trade facilitation and tax is trying to improve the investment climate without going into harmful tax competition."

The commitment to working with revenue agencies in developed and developing countries is clear. The WCO has a number of capacity building initiatives under way around the world.

"It's important we enhance cooperation, communication, collaboration and coordination," Mikuriya says. "We (tax and customs) are different animals but we should try to identify where we can find common ground, where we can cooperate for mutual benefit."

Rudolf Elmer


Rudolf Elmer's name hit the international headlines when he was exposed as the whistleblower on the activities of his former employer, Swiss bank Julius Bär, in the Cayman Islands, handing over the names of 2,000 tax evaders to WikiLeaks – the website set up by Julian Assange to publish secret information.

His influence remains strong not just for hole he blasted in Switzerland's sacred banking secrecy, which led the country to accept a number of withholding tax agreements, but for the trouble he has been causing Julius Bär since he was arrested and put on trial.

In the latest twist to a case that has now lasted more than six years, the High Court of Zurich in June this year opted to unseal the three CDs at the heart of the matter.

But with the trial being held in public, at Elmer's request, the contents of the CDs could prove devastating for Julius Bär when they are revealed. Not least because Elmer only published 5% of the data on WikiLeaks and he says there is much worse to come.

Elmer says the bank tried to pay him for his silence (ironic considering it rejected his first attempt to settle out of court in 2003), but since the prosecution is compelled to investigate the crime of breaching banking secrecy, Elmer cannot settle even if he wanted to. And he does not.

"I turn down all offers not only as a matter of principle, but also due to the fact that my daughter and her generation will suffer from what is going on," says Elmer. "My daughter needs to learn values and one of the values is integrity and to stand up if something is not right. That is why Switzerland will not be able to silence me."

Banking secrecy around the world is under attack and the net Elmer helped cast is now closing on tax evaders.

Becoming a whistleblower cost Elmer his job and the hounding he and his family faced afterwards nearly cost him his sanity, but the best martyrs do not back down if they believe their cause is just.

Brian Ernewein

General Director, Tax Policy, Department of Finance Canada

Canada's federal budget in March caused a stir among taxpayers with the inclusion of new rules which significantly restrict a foreign-owned Canadian subsidiary's freedom to invest in a foreign affiliate.

As the general director of legislation in the Canadian Department of Finance's tax policy branch, Brian Ernewein is a key figure behind the so-called foreign affiliate dumping rules.

And the proposal is proving to be one of the most controversial Ernewein has overseen during his tenure.

The new rules are targeted at preventing the misuse of provisions of Canadian tax law which allow resident companies to deduct interest on funds borrowed to make share investments in foreign companies, and that dividends received on such shares might be exempt from Canadian tax.

The Department of Finance felt that these provisions were being abused in some instances, such as where profitable Canadian subsidiaries of foreign based groups were borrowing to invest in fixed value-fixed yield preferred shares of a foreign member of the group.

Nathan Boidman, of Davies, Ward, Phillips & Vineberg, said it is understandable the government wishes to discourage such preferred arrangements since it erodes the Canadian tax base while giving little or no economic value to the Canadian subsidiary.

"Unfortunately, the proposals will also affect a wide range of transactions that have no or little tax-driven characteristics," said Boidman.

"The overreaching scope of the proposals is radical as they would not apply a new tax rule to the eventual income or expenses associated with the targeted investments, but instead apply a tax at the point the investment is made," he added.

The Tax Executives Institute has urged the policymakers to completely carve growth equity (common share) investments out of the proposals but Ernewein and the Department of Finance have held firm, and rejected these recommendations when they issued the final version of the rules in Bill C-45 last month.

David Gauke

Exchequer Secretary to the UK Treasury

David Gauke has been a pro-business tax minister since he became exchequer secretary to the Treasury after the last election in 2010, and has been an advocate of the Conservative Party's policy of pursuing a private sector-led recovery.

"When I was in opposition and shadowing this role, I greatly benefitted from hearing industry views. This has informed my approach since coming to office and I meet regularly with tax professionals and representative bodies," he told International Tax Review. "My familiarity with industry issues and the concerns of tax professionals and business have helped shape the government's priorities as we work towards improving the tax system."

Gauke has been a leading light in promoting the coalition government's "Open for Business" agenda, which has included reform of the controlled foreign company and patent box regimes, as well as a series of cuts in the corporate tax rate. Since the government came to power, the rate has fallen by four percentage points, from 28% to 24%. Further reductions have already been signalled, and the rate will drop to 22% by 2015.

"The real challenge for me coming into this job was to show that Britain has an attractive tax system and is open for business," said Gauke. "We need to demonstrate that business from all around the world is welcome in Britain."

Gauke recognises that the "Open for Business" agenda is a comprehensive reform package, and that each of the measures included is essential for the UK to achieve the government's ambition of having the most competitive corporate tax regime in the G20. While other countries have used singular taxation measures to try and drive investment (typically cutting the corporate tax rate), Gauke and Chancellor of the Exchequer George Osborne have driven through a panoply of measures.

"Lowering the main rate alone is not enough," said Gauke. "We are supporting this with a raft of measures that will increase the UK's attractiveness as a place to set up and grow a business: CFC reform, the patent box and R&D tax credits."

He has also joined Osborne in branding tax evasion and aggressive tax avoidance as "morally repugnant". The latest UK tax gap statistics, released by HMRC on October 18, reveal that the tax gap has moved from 7.1% of tax due in 2009/10 to 6.7% of tax due in 2010/11, indicating that the government's policies (and HMRC's efforts) appear to be working.

"We are determined to reduce the tax gap and have made £917 million available to help HMRC tackle avoidance and evasion," said Gauke.

Global Tax Advocacy Taskforce, TEI

Vince Alicandri, Janice Lucchesi, joint-chairs

The TEI (Tax Executives' Institute) is a singular organisation. Other groups exist to represent the views of tax officers, often on a sectoral basis, such as the American Petroleum Institute or national employers' federations, but TEI is the only global organisation to have representing the views of tax officers solely as the reason for its existence.

A core function of TEI is to raise the views of its members with revenue agencies, multilateral organisations and lawmakers around the world, so when it set up the Global Tax Advocacy Taskforce this year to review its processes and practices related to its multijurisdictional activities, it was bound to have an influence on tax policy development internationally. Some of that influence may not have been felt yet.

The taskforce's set of nine recommendations, or charter objectives, included calls for working more closely with organisations such as the OECD and the UN, for example, on developments in the BRIC (Brazil, Russia, India and China) countries; responding more effectively to treaty issues and ensuring that TEI's advocacy was coordinated efficiently across Asia, Europe, the Middle East and Africa and North America.

As joint-chairs of the taskforce, Vince Alicandri, vice president, corporate tax for Hydro One, a Canadian utility company, and Janice Lucchesi, vice president of tax in North America for Akzo Nobel, the Dutch multinational paints, coatings and chemicals company, were responsible for ensuring the charter objectives were adhered to.

ITR: What need was the taskforce set up to address?

Janice Lucchesi (JL): A primary goal was to expand TEI's tax advocacy efforts beyond North America and to ensure that they reflected the concerns of our growing number of non-North American members. We also wanted to acknowledge the growing influence of organisations like the OECD and UN. Internally, we wanted to recognise the role our Europe/Middle East & Africa and Asia Chapters could – and should – play in TEI's advocacy efforts, while ensuring appropriate coordination among all our committees with interest in global tax matters.

Vince Alicandri (VA): Because TEI has developed into the preeminent association of in-house professionals worldwide, TEI felt it important to review the processes and practices relating to multi-jurisdictional tax issues to ensure our members' interests were being properly represented.

ITR: What impact do you believe it has had to date?

JL: I have seen a dramatic effect, both internally and externally. Internally, we have seen more members become involved in our efforts, enriching our efforts and allowing us to do more. Externally. 2012 has witnessed significant tax-related activities at both the OECD and UN level. TEI has sent a representative to a UN tax meeting for the first time. In addition, TEI has filed several significant submissions with the OECD, as well as with the European Commission, which have reflected the coordinated input from both European and North American international tax-related committees.

VA: I believe the most important effect the Global Tax Advocacy Task Force has had to date has been the critical assessment we have undertaken to ensure we as an organisation are properly positioned to affect the direction of international tax matters affecting our membership.

ITR: What is the best example of its impact?

JL: In my view, the best example is the Institute's outstanding submission on the OECD draft on the transfer pricing aspects of intangibles.

VA: Internally, the best example has been the refinement of processes to enable TEI's international tax committees to coordinate effectively in the development of technical submissions without undue bureaucratic delay. This has encouraged members to get involved.

ITR: How will the taskforce's work help TEI in the future?

JL: The implementation of the taskforce's recommendations on enhancing interaction among TEI members across the globe (for example, using SharePoint to enhance sharing, conducting bi-monthly coordinating calls and increasing Institute staff participation in European and Asian TEI meetings) will enable the Institute to do more and to do it better.

VA: The taskforce has made recommendations that will ensure multijurisdictional international tax issues affecting Institute members are discussed, evaluated, and acted upon in a coordinated fashion.

Connie Hedegaard

European Commissioner for Climate Action

Connie Hedegaard's remit at the European Commission includes carbon tax policy and as its importance as a tool for tackling climate change and greening the economy grows, so too does her influence.

Among Hedegaard's key roles at the Commission is to develop the Emissions Trading Scheme and to promote links with similar schemes around the world.

With Australia and California looking to link their carbon markets to the EU's, and with the possibility of China following suit, Hedegaard presides over what may turn out to be a global emissions trading scheme.

It is an ambitious project, but one for which Hedegaard's past life as Denmark's minister for climate and energy has prepared her well. Denmark is considered by climate activists to be a leader in environmental tax reform and it was Hedegaard who implemented the framework in 2008.

"My ambition is to see, by the end of my mandate, a Europe that is the most climate-friendly region in the world," says Hedegaard.

François Hollande

President of France

Since coming to power in May this year, President Hollande has undertaken various measures to address the nation's deficit, subscribing to the view that it is tax policy, rather than spending cuts, which is a better method of dealing with France's economic problems.

"I'd say François Hollande puts importance rather on tax than on cuts in expenses to tackle budgetary issues," says Nicolas Jacquot, of Arsene – Taxand, adding that the president is not afraid to "use tax to sanction behaviours which are considered, from a strictly political point of view, as questionable".

Hollande's focus on economic growth, and using taxation as a tool in this regard, has also influenced political thinking in other jurisdictions, says Nicolas Message, of FTPA.

"President Hollande forces many foreign politicians to take into account the growing of economy into the definition of a state level of indebtedness," he says. "As a consequence, public debates are more related to the level of growth and the corresponding taxation, than to the need to drastically reduce governmental or public expenses."

Hollande is also taking the lead on the issue of a financial transactions tax (FTT) by doubling the rate that was first levied by his predecessor Nicolas Sarkozy. Though the previous government got the measure through parliament, implementation of an FTT has proved to be troublesome, most notably at EU-level, so Hollande's bold actions have been influential in reshaping the debate surrounding the tax. In the Portuguese draft 2013 budget, a proposal was included that authorises the government to introduce an FTT, and though details are scarce at this stage, it is thought that implementation in Portugal would be inspired by the French model.

"My enemy is the world of finance," Hollande declared in May.

The president has not been in power long, but if his actions as premier to date are anything to go by, his influence on international tax and tax policy will only increase during his time in office.

Sarosh Homi Kapadia

Former Chief Justice of India

To say that Justice Sarosh Homi Kapadia has had a Gargantuan influence on tax policy in the last 12 months is no exaggeration.

In his ruling in Vodafone in January Justice Kapadia, now an ex-chief justice – having ended his tenure in September – disagreed strongly with stance of the Indian tax authorities on the indirect transfer of shares and was praised by taxpayers for doing so.

However, even now the effects of that decision have yet to be fully realised. The Indian government's reaction to Vodafone was to insert retrospective amendments into the Income Tax Act, 1961, allowing India to tax the sale of Indian assets, even if the seller and buyer are both foreign, in spite of Justice Kapadia's ruling. But the extent and circumstances under which this will apply are still being debated.

Through Vodafone, Justice Kapadia has set the tone for the adoption of a more pro-investor stance from the judiciary. The judgment also introduced lower courts and authorities in India to a much needed unified approach when considering tax transactions.

Justice Kapadia's approach will prompt India's tax authorities to consider a greater number of facts in tax planning cases, forcing them to consider transactions from the taxpayer's commercial perspective.

"The Vodafone case was always destined to be a watershed moment in Indian tax law," said Ravishankar Raghavan, of Majmudar & Partners.

"Although the relief given to Vodafone was short-lived due to the subsequent retrospective amendments inserted in the Income Tax Act, its rationale and approach have endured and are echoed in many judicial decisions of the Authority for Advance Ruling (AAR) and the Income Tax Appellate Tribunals, showing clearly that the judgment has had an effect – and will continue to do so – on tax litigation in India," he added.

Justice Kapadia was also part of the bench that ruled in the Columbia Sportswear vs DIT case in August. In Columbia the judges ruled that a tax payer can appeal any decision rendered by an AAR in its case to a high court. The decision reiterated that under the powers provided by the Indian Constitution, a high court could exercise judicial superintendence over the decisions of all courts and tribunals within its jurisdictions including the AAR.

Philip Kermode

Director of Direct Taxation, Tax Coordination, Economic Analysis & Evaluation at the European Commission

Philip Kermode is a longstanding member of the European Commission's tax team.

Kermode started his career there in 1987, working on indirect taxation aspects of the internal market proposals dealing with the abolition of fiscal frontiers and now has responsibility for some of the Commission's most important tax projects.

In January, Kermode launched a public consultation to assess situations where double non-taxation of cross-border companies was occurring in the EU and between third states, with the hope of finding new ways to resolve them.

The consultation's findings were released in June and Kermode now aims to develop a policy response before the end of 2012.

Kermode is also heavily involved in the Commission's plans for a common consolidated corporate tax base (CCCTB), and despite criticism from a number of member states stalling its progress, he still hopes to see this reform introduced, believing it would help to solve a myriad of tax issues in the EU.

"I believe the most comprehensive way to tackle double non-taxation would be for the member states to adopt the Commission's proposal for the CCCTB," Kermode told International Tax Review.

"Many of the problems with double non-taxation and double taxation stem from divergent national tax rules in member states. A lot would therefore be solved by having the CCCTB," he added.

Advocate General Kokott

European Court of Justice

Only the third woman to be appointed as an advocate general of the European Court of Justice (ECJ), and one of only a handful of women to make International Tax Review's Top 50, Juliane Kokott wields considerable influence on EU tax rulings through opinions delivered to the court. Though it is not unprecedented for the judges to disregard an advocate general's view of a case entirely, it happens infrequently. All 27 EU member states are bound by decisions of the ECJ and despite retaining their individual sovereignty and the ability to enforce their own tax laws and regulations, each state must ensure its tax legislation and revenue authorities do not act to restrict the fundamental freedoms of the EU: the freedom of movement of goods, services, capital and people.

As the UK discovered recently when the European Commission hauled it back to the ECJ over its cross-border loss relief rules – an issue HMRC thought was resolved after Marks & Spencer – these freedoms will be defended vigilantly by the Commission and by the court, and tax legislation of all EU states must fall in line.

There has been no shortage of tax cases before the ECJ in the last 12 months. Advocate General Kokott delivered opinions in perhaps two of the most significant – National Grid Indus and Philips Electronics UK.

Both National Grid Indus – which said taxpayers may opt for deferred payment of corporate exit taxes – and Philips Electronics UK – which held that the UK's loss relief rules for branches infringe EU law – closely followed Advocate General Kokott's opinions, underlining the court's reliance on her breadth of experience in tax cases.

Chris Lenon

Group Strategic Adviser – Tax Policy, Rio Tinto

As outgoing chairman of the Tax Committee of the Business and Industry Advisory (BIAC) to the OECD, Chris Lenon has represented a strong business voice at the tax policy table.

But BIAC is not the only place where his input into the development of tax policy can be seen. His membership of Business Europe's tax policy group, and his responsibility for environmental tax on the International Chamber of Commerce's tax committee, means Lenon is an excellent example of the strong and positive influence that business can, and must, exert on decision makers.

"I think there is recognition from the OECD that responsible business input into tax policy decisions leads to better tax policy decisions. Our challenge is to provide that responsible business input," said Lenon, on the importance of BIAC.

He highlights the three key areas of BIAC's work in the past 12 months as:

  • participation in the OECD's tax and development task force, working particularly on how to build capacity in tax administrations in developing countries;

  • working on the OECD project on intangibles; and

  • establishing relationships with key economies outside the OECD. BIAC has already engaged with China's State Administration for Taxation and the Indian tax authorities, and has plans to meet with senior Brazilian tax officials in 2013.

"An important theme of BIAC's current work is engaging with the BASIC [Brazil, South Africa, India and China] countries and considering how we can try to maintain one set of standards for international tax and trade," said Lenon.

While historically the OECD has focused on tax treaties and transfer pricing, Lenon said it is increasingly involved in more political elements of tax.

"I lead the tax and development taskforce for business which supports the OECD and IMF in building the capacity of developing countries' tax administrations," said Lenon. "Initial work with Colombia and Mongolia has been successful, though capacity also needs to be supported by a better exchange of information process and information for tax authorities, such as including common transfer pricing information in tax returns."

As Rio Tinto's global head of tax from 1993 to 2010, and through his current position as the group's strategic adviser for tax policy, Lenon was involved in the mining multinational's decision to disclose tax payments to governments in all countries in which it operates.

"Through my time at Rio Tinto and BIAC I have been a strong advocate of transparency and believe that reports such as Rio's can do much to address concerns about the level of tax payments by corporates – transparency will not go away as an issue," Lenon said.

And Lenon also hopes his hard work in the area of environmental tax will make an impression on tax policy.

"Tax and the environment is becoming a more significant issue, particularly as emission trading systems form linkages across borders, so it is crucial that a robust tax policy framework underpins the policy initiatives to foster green growth, and I hope that I have helped elevate the profile of this key issue," he added.

Carl Levin

Chairman, US Senate Subcommittee on Permanent Investigations

While the rest of Congress are fighting election campaigns, either on their own behalf or supporting their colleagues, Carl Levin, the senior senator for Michigan, has still found the time to maintain his long-term opposition to offshore tax evasion.

On October 5, he wrote to other senators and Congressmen and members of the Obama Administration, seeking a post-election bipartisan agreement to close what he saw as 10 abusive offshore tax loopholes used by US multinationals, including using transfer pricing to move profits to low-tax jurisdictions; returning money tax free to the US from abroad using serial loans; and deducting from taxable income the costs of moving jobs and operations overseas.

In the letter, Levin said the Permanent Subcommittee on Investigations, which he chairs, had examined the loopholes over the last decade. He said their abolition should be part of a balanced, deficit-reduction package, which would require extra revenues and cuts in spending.

"Legislation to close abusive offshore tax loopholes is readily available and would raise hundreds of billions of dollars in additional tax revenues over ten years," he wrote.

Levin has a long history of opposition to tax havens and has used his role effectively as chairman of the Permanent Subcommittee on Investigations to bring his concerns about offshore tax evasion to wider public attention.

He has succeeded. Articles about the use of low-tax jurisdictions are now common in the US media, as well as in trade publications. This increase in interest is not just down to one man, but Levin has used his position with skill to ensure the topic caught the media's attention.

On the floor of the Senate in July, Levin spoke of the Permanent Subcommittee's history of scrutinising offshore tax havens since at least 2001. His doggedness has ensured the topic has stayed in the headlines this year.

Oupa Magashula

Chairman of the African Tax Administration Forum

Oupa Magashula is still leading the way in enhancing tax administration across sub-Saharan Africa.

Magashula is the chairman of the African Tax Administration Forum (ATAF), which brings together 34 tax administrations from across the African continent to provide skills training and to create a platform for African tax and customs administration to develop and share expertise and experience.

"The biggest problems tax administrations face is the lack of capacity. We are trying to improve this through ATAF but a lot of our members need more capability. The result of this is that they are unable to investigate complicated structures and undertake complex audits," said Magashula.

Since Magashula appeared in this list last year, 21 ATAF member countries have reached consensus on the text of an African Agreement on Mutual Assistance on Tax Matters in South Africa.

The agreement was in reaction to an estimated $500 billion to $800 billion of illicit capital flight from the continent.

The most recent ATAF meeting was held in Dakar, Senegal, in September, where Magashula spoke to member countries about research into country experiences with tax incentives and efforts to harmonise tax policy in the region.

Sam Maruca


The tax world sat up and took notice when the Internal Revenue Service (IRS) in the US appointed Sam Maruca as the transfer pricing director in the Large Business & International (LB&I) division in May 2011.

Since then, Maruca has been involved in the reshuffling of the corporate tax department, in particular the advance pricing agreement (APA) and mutual agreement (MAP) programmes, which have been combined into the APMA unit.

The effects of the reshuffle, and Maruca's focus on enforcement, are beginning to show. The IRS is now looking to make up for recent defeats in transfer pricing litigation by focusing on the operations of high-tech companies, particularly those in Silicon Valley. But practitioners are seeing a more general move away from litigation as companies and the government try to avoid costly court cases. The IRS is taking a more targeted approach to litigation, cutting the number of cases but ensuring they pick the right ones to litigate.

Maruca is also building up the staff in his transfer pricing team, with a number of advisers telling International Tax Review over the course of the year that they have lost mid-to-high level practitioners to Maruca's reshuffle.

Traditionally, a role at the IRS was not as well paid as one in private practice so this shows the Service's commitment to boosting its expertise in handling transfer pricing cases.

Sanjay Kumar Mishra

Joint secretary, Ministry of Finance, India

India has finally introduced an advance pricing agreement (APA) programme. After much deliberation and anticipation, the initiative allows for bilateral APAs, which will be processed through the competent authority and, consequently, the influence of Sanjay Mishra joint secretary and competent authority in the Central Board of Direct Taxes (CBDT), will be felt.

The APA team has been formed by the CBDT transferring nine officers.

Five members of the team will be based in Delhi with two each in Mumbai and Bangalore, with immediate effect.

Most of the officers are deputy/joint directors of income tax. They will continue to retain their present postings as an additional charge, reminiscent of the situation for the members of the dispute resolution panel, who also have dual posts.

The development of an APA programme was the most significant for transfer pricing in the 2012 budget. It has since received the Presidential assent and has been included in the Finance Act 2012.

Kamlesh Varshney, the Commissioner of Income Tax (APA), said: "It is heartening to note that the Indian APA regime is received well by the tax experts overseas. On behalf of the APA teams in India, I can confirm that all the members are motivated to make this scheme of Government of India a major success."

John Mitchell

Vice president for tax – Eaton Corporation

Eaton Corporation's VP for tax has a long road ahead of him. The company is embroiled in a dispute with the US IRS over the terms of an advance pricing agreement. The outcome could mean that the agreement is reneged by the IRS, which would clearly have a big impact on the way corporate entities view APAs with the IRS in future.

With responsibility for Eaton's worldwide tax liabilities, Mitchell will need to draw on his wealth of experience, across advisory and in-house roles over the past 34 years, to argue the company's case with the IRS.

Mitchell also has a large tax deal under his belt in his time at Eaton. The company moved its headquarters from the US to Dublin earlier this year. Transactions such as this are increasing the support for reform of the US tax system to halt the migration of US technology firms to low-tax jurisdictions.

Eaton completed its acquisition of electrical equipment supplier, Cooper Industries, already resident in Ireland, in May 2012 for a transaction equity value of $11.8 billion. By deciding to locate the new, combined, company's headquarters in Ireland rather than in Cleveland, Ohio, Eaton says it will save $160 million in taxes by 2016.

The tax industry will have high hopes for Mitchell and his disputes team. If the IRS succeeds in revoking the APA, it could have a knock-on effect on general APA application in the US, prompting questions such as: Is it worth it? How can we trust the IRS to keep their word when the cost of APA can be significant?

Will Morris

Will Morris has a lot on his plate. The global tax policy director for GE also chairs the CBI (Confederation of British Industry) tax committee, the AmCham EU Tax Task Force, the European Tax Policy Forum and has just accepted the role of chairman of BIAC's (Business and Industry Advisory Committee to the OECD) tax and fiscal policy committee, taking over from Chris Lenon. On top of that, he is a priest at the Anglican church of St Martin-in-the-Fields, in London.

"As a part-time priest at St Martin-in-the-Fields, I try on a regular basis to bring together NGOs, government, business tax directors, academics, big 4, etcetera, together at St Martin's to talk about tax and development issues in a neutral setting."

Most people who work in tax policy understand the time commitments can be significant. But as Morris does more than most, how does he manage his time?

Morris says the answer is to this is practical and philosophical.

"On the practical side, I view my role as chair of each of these groups as one of coordinator, facilitator and team builder – not micromanager or one-man-band. In terms of getting things done, none of these groups has particularly large secretariats, and I am not in a position to draft everything – even if I wanted to – so we work on a project/team basis. Specialists on the various committees take the lead on different subjects. I provide coordination, and ideas on direction, but the heavy lifting on each major project is done by a team. This has worked well at CBI and BIAC is also moving in that direction.

"The more philosophical answer is that I believe there is a real strategic synergy between these jobs because there are perhaps four or five relatively new, but very pressing, issues in international tax that apply at both national and international levels."

These revolve around how to deal with these generally interrelated, tax issues:

  • Pressure to raise more revenue, especially in developed countries;

  • The growing shift in economic power in the world to non-OECD countries;

  • The tax issues arising from globalisation, such as the taxation of intellectual property;

  • New stakeholders in the tax system, such as non-governmental organisations (NGOs); and

  • the increasingly negative public perception of the tax affairs of multinational business;

Morris is now faced with how to push BIAC's agenda forward. He wants to improve the organisation's communication about the positive and negative impacts of international tax policy decisions on global businesses and their ability to create economic growth and jobs. He also mirrors Pascal Saint-Amans's aim to improve relations with non-OECD member countries "to strengthen the case for the OECD as a single global standard-setter that can promote consensus rules".

Chris Needham

VAT director, GE

There are some who say that when a tax director is doing his or her job properly, they should keep quiet about it. Not everyone feels the same. Some tax directors are vocal about tax policy, considering this to be a vital part of their work, and when it comes to indirect tax, there are few more outspoken than Chris Needham.

Perhaps this stems from his rare CV, a tax director who has worked for both a tax authority and one of the Big 4 accounting firms.

Needham has been a leading business figure in the push for European VAT reform.

He likes aspects of the European Commission's proposals to change VAT rules, such as:

Moving to a destination-based system under the precondition that business gets easy access to information and that an easy to apply broad One Stop Shop (OSS) will be put in place.

More information; an EU web portal on information; more transparency in the legislative process through a tripartite EU VAT Forum; publishing of VAT Committee guidelines and explanatory notes; and standardisation of VAT obligations and forms.

But dislikes others such as anti-fraud measures that increase the compliance burden on legitimate taxpayers and multiple VAT rates and exemptions.

"Business is the unpaid tax collector for the government and must bear the administration burden," says Needham. "Legitimate businesses are partners with the authorities, not criminals."

Occupy & Uncut

Social movements

For months, it was impossible to leave ITR Towers without wading through a sea of tents filled with hippies, socialists, anarchists in Guy Fawkes masks, punks, students and, yes, ordinary concerned citizens camped outside St Paul's Cathedral. For some they were an eyesore littering the pavement outside one of London's most iconic buildings. For others they were heroes, braving the harsh winter to take a stand. Either way, they sent a message and the media heard it.

The new ad hoc, bottom-up social movements, exemplified by Occupy and Uncut, that have sprung up around the world to try to take over stores and Wall Street alike have tax at the heart of their agenda. Far from the unfocused layabouts their enemies might like to see them as, their core objective has always been holding banks and big companies to account for their role in the financial downturn and their encouragement of government austerity measures to fix it. Crucial to this is ensuring these organisations pay their fair share of tax.

The original campers in Zuccotti Park in New York and outside St Paul's have long since been sent on their way, but the issues they brought to public attention cannot be swept aside so easily.

Detailed information about the tax corporations do or do not pay, is being splashed across daily newspapers and websites like never before.

These stories are moving corporate tax matters from the business sections to the front pages. They are not simply an interest for shareholders, but have become one for society at large.

Occupy and Uncut's methods may divide opinion, but they arguably did more than anyone else to focus media and public attention on these issues.

In time, these flames that burned brightest may prove to burn shortest. But as long as people feel the pain of public service cuts, as long as they perceive corporations to be avoiding the taxes they are morally obliged to pay and as long as they consider both to be unfair, these social movements which claim to represent 99% of the population will continue to be important.

Alexey Overchuk

Deputy director general for transfer pricing at the Russian Federal Tax Service

Russia's Parliament finally approved transfer pricing legislation in December 2011, replacing the existing, primitive rules with a more sophisticated regime, which includes advance pricing agreements (APA).

Alexey Overchuk, the deputy director general for transfer pricing at the Russian Federal Tax Service said in an implementation note to the OECD:

"Combating transfer pricing deals between related parties that shift the tax base between jurisdictions for tax avoidance purposes is not entirely new for us. In an economy like Russia's, relying on the export of mineral resources for revenue, the absence of effective tax administration of transfer pricing presented a visible problem."

Under the new transfer pricing rules taxpayers could be facing two audits: one from the specialised transfer pricing team, and a regular audit from the regular federal tax inspector. Moreover new rules create additional controversy between regular tax audits and transfer pricing audits in case their results contradict or affect one another. The Russian Ministry of Finance has clarified that, while the local tax authorities cannot audit the transfer pricing matters of a taxpayer they may nevertheless request the provision of all documents as part of their regular tax audits, including those relating to the transfer pricing posture of the company being audited. This interpretation of the rules therefore makes it highly important to ensure the appropriate compliance and that document disclosure procedures are maintained at Russian companies. This should be done to avoid tax issues that may arise from the accessed transfer pricing documentation as a result of the local authorities challenging the operations under general legal grounds as different from those set by new transfer pricing rules.

Additionally, to increase tax collection under the transfer pricing rules, a special transfer pricing department at the Federal Tax Service has been created.

"The approval of our new transfer pricing law by the Parliament was preceded by discussions between the business community, legislators, tax policymakers and tax administration officials, thus reflecting a wide spectrum," Overchuk said in the note. "There was debate about the complexity of the transfer pricing methods and the feasibility of their application, the availability of comparable data and taxpayers' concern about increased administrative tax burden. Others were concerned about the lack of capacity among taxpayers and tax officials to effectively apply the provisions concerning APAs and mutual agreement procedures as well as corresponding adjustment.

"Despite all these drawbacks it was evident that the introduction of internationally recognised transfer pricing rules and procedures would outweigh the difficulties. The new legislation is based on the arm's length principle, a new concept in the Russian tax law."

Since Russia's new transfer pricing rules were released, there has been much debate over how they should be applied. The Ministry has clarified how taxpayers should calculate the threshold for controlled transactions, but its interpretation leaves companies with a choice of non-compliance or dedicating more resources to transfer pricing.

"Companies will need to assess the risk of not documenting some transactions against the cost of being completely compliant," says Evgenia Veter of Ernst & Young. "To be fully compliant taxpayers will need to spend a lot of time and money on people and management services to prepare transfer pricing documentation for even very small transactions.

"Taxpayers will still want to prepare documentation for more sensitive transactions but may be willing to accept some risk to avoid the cost of documenting every transaction."

Overchuk will have to tackle all these issues and more if he wants to improve the overall efficiency of Russia's transfer pricing regime. His influence at this time could be critical to the way Russia's regime interacts with the global standard.

PACE Coalition

The rest of the world is looking on with fascination, and not a little interest, as the US tries to reach a consensus on tax reform. One decision has already been made: law makers, tax officials and taxpayers agree that an overhaul of the Internal Revenue Code is overdue. The last one took place 26 years ago in 1986.

Where the US leads on tax policy, other jurisdictions often follow, so the influence of any group or individual on the process of reform in America will be felt in other parts of the world.

One such group which has caused politicians to think hard about the policy choices is the PACE [Promote America's Competitive Edge] Coalition. The group aims to protect what it says are the 63 million American jobs that depend on the international competitiveness of US companies worldwide.

"To ensure American competitiveness, PACE advocates that the US maintain a level playing field for taxation of international operations, and not act unilaterally to disadvantage US companies," the group says.

The PACE Coalition is made up of a number of different taxpayer organisations: the Business Roundtable; the National Association of Manufacturers; the National Foreign Trade Council; the Technology CEO Council and the US Chamber of Commerce.

"The coalition's real impact is in education," says Matt Miller (pictured), vice president, Business Roundtable. "International tax rules are extremely complex and easily misunderstood. In our communications with Capitol Hill and the administration we have been able to ensure a greater understanding of the significance of these rules."

PACE's key policy issues include the need to move to a territorial system, where income is taxed where it is earned, not where the taxpayer is resident. Miller accepts this would be a big change

"But it's important," he says. "We're dealing with a century-old system. It's completely outdated."

Miller believes politicians will have more interest in tax reform after the presidential election.

"We are optimistic that when we get beyond the campaigning and back to policy making, we will get a competitive territorial system," he says. "We have to get the economy growing and tax reform is a big part of that."

Sebastián Piñera

President of Chile

Sebastián Piñera has made great strides since being elected president at the start of 2010.

His vast business experience, and success before becoming president, with stakes in various companies including television channel Chilevision, LAN Airlines and Colo-Colo football club, meant he was the first billionaire to have been elected as Chilean president.

But it is his achievements since he became president, and particularly those of the last 12 months, that mark him out as influential in taxation. He has succeeded in developing tax policy where his predecessors have failed.

"President Piñera has been able to bring about a tax reform that is more aggressive and far-reaching than previous administrations," says Marcelo Muñoz, of Salcedo & Cia. "While maintaining the basic principles of our tax system – for example the two-level taxation on corporate incomes – the reform covers several topics and taxes, from the stamp tax to the income tax."

The reform also provides for the creation of a fund for the improvement of education in Chile, which Muñoz says was a "main cause of the political consensus for approval of the new law and which gave momentum to the president's initiative".

Pushing through tax reform is often extremely difficult, as winners and losers are inevitably created, leading to lobbying from all sides. Piñera's pragmatism in tying the reform to an initiative aimed at improving education standards in the country was therefore an innovative ploy.

Piñera has also played an important role in strengthening Chile's ties with the OECD since it became the first South American country to join the organisation in 2010.

"The fact Chile has become a full member of the OECD has had a direct effect on many issues, especially in transfer pricing," says Muñoz. "This new law represents a major step forward in this topic, putting us on a similar level with the other members of the international organisation."

Michael Plowgian

Attorney Advisor, US Department of the Treasury

The rise of the Foreign Account Tax Compliance Act (FATCA) is one of the biggest stories in international tax from the past 12 months.

Michael Plowgian, Attorney Advisor in the Office of the International Tax Counsel at the US Department of the Treasury, is the legislation's principal draftsman.

An experienced tax compliance specialist, Plowgian is also the co-chairman of the Treaty Relief and Compliance Enhancement (TRACE) project at the OECD and represents the US on the OECD's Working Party 10 on Exchange of Information and Tax Compliance.

Under FATCA, foreign financial institutions (FFIs) will be required to automatically report the identity of account holders, the beneficial owners of accounts, the balance of accounts and any withdrawals or payments from accounts held by US tax residents, or pay a withholding tax of 30%.

A series of intergovernmental agreements on the implementation of FATCA is set to commit the US to reciprocal exchange of information on partner country account holders with US financial institutions. . The UK-US agreement has already been released and other countries in negotiation with the US include France, Germany, Italy, Spain, Japan and Switzerland.

If other countries follow suit – as is likely – FATCA could shape the way in which bank account information is exchanged for tax purposes the world over.

Jorge Morley-Smith, head of tax for the Investment Management Association, said financial institutions are contemplating the prospect of the expansion of FATCA and automatic information exchange (AIE) to many countries around the world and its impact cannot be overstated.

"The additional information required on account holders under FATCA could change the dynamics of how the fund distribution market works," he said.

RATE Coalition, US

Elaine Kamarck and James Pinkerton

As co-chairs of the RATE (Reforming America's Taxes Equitably) Coalition, Elaine Kamarck and James Pinkerton, who hail from both sides of the political aisle, have made it their mission to see the US undertake comprehensive reform of the tax code.

RATE describes itself a coalition of businesses, associations and other like-minded groups that are joining together to advocate for sound and equitable reforms to the tax code that will restore the competitiveness of the US as a place to invest and grow, and boost job creation and economic growth.

One of the coalition's key objectives within that overall remit is to reduce the corporate tax rate to ensure it is competitive with America's major trading partners. As part of this effort, the group has said that though a lower rate would justify itself via increased economic growth, budgetary implications must be taken into account, and therefore "if necessary to facilitate a meaningful reduction in the corporate tax rate, corporate tax base-broadeners should be on the table". This is something that both President Obama and his Republican challenger, Mitt Romney, have acknowledged.

However, in making such decisions, RATE has been vocal in opposing the view that negotiations over which tax breaks to keep (or, conversely, which to remove) should be done in public. That view is based on the fact that doing so would create specific winners and losers, and thus make reform more difficult.

"This is something that should not be engaged in public," said Kamarck. "Because once it's engaged in public, you cannot get a deal. Engaging in a discussion about this expenditure versus that one is politically really counterproductive."

Kamarck is no stranger to dealing with political roadblocks, having served in the White House from 1993-1997, and having worked as senior policy adviser to the Al Gore presidential campaign in 2000.

Pinkerton, Kamarck's co-chair at RATE, also has extensive experience of life in Washington, working in the White House domestic policy offices of Presidents Ronald Reagan and George HW Bush, as well as serving in various presidential campaigns, most recently as senior adviser to Mike Huckabee in his 2008 bid for the presidency.

The influence of the RATE Coalition is set to increase following the outcome of the upcoming presidential election, after which the issue of tax reform will become more urgent.

Marshall Rothstein

Supreme Court of Canada

While not a tax lawyer by training, Justice Marshall Rothstein has been the clear advocate on most landmark tax cases brought to the Supreme Court of Canada (SCC) since his appointment as a Supreme Court Justice in March 2006.

Even before this, tax professionals felt his impact on the interpretation of the law. When he served on the Federal Court of Appeal, he penned the OSFC Holdings decision that has served as the template for GAAR analysis in Canada.

Mark Meredith, of KPMG in Vancouver, praises him for his "careful, thoughtful and influential" decisions.

The last 12 months have seen him deliver further influential judgments:


Justice Rothstein was responsible for delivering the SCC's first ever transfer pricing ruling last month, which looked at whether the price paid by pharmaceutical company GlaxoSmithKline for an active ingredient from a Swiss associated enterprise was calculated in a reasonable manner.

The court held that the determination of an arm's-length price must be informed by relevant surrounding economic circumstances, including other transactions that may be related to the purchasing transaction.

"With great perception, Justice Rothstein, writing for the Supreme Court, rejected the OECD transfer pricing guidelines as a mechanical, baked-in, part of Canadian law," said Nathan Boidman and Olivier Fournier, of Davies, Ward, Phillips & Vineberg.

Brad Rolph, of Charles River Associates, said the ruling will mean taxpayers can no longer rely on simply taking apart tax authority analysis. "They [taxpayers] have to put forward analysis that supports their price," he said.

St Michael Trust Corp

The SCC, led by Justice Rothstein, dismissed the taxpayer's argument that the residence of a trust, with its beneficial owners resident in Canada, should be determined by the residence of the trustee for tax purposes.

Copthorne Holdings

In a case where the Canada Revenue Agency (CRA) invoked the general anti-avoidance rule (GAAR), Justice Rothstein penned the ruling which held that a return of capital payment to a shareholder was an abusive tax transaction.

Justice Rothstein warned the CRA that in GAAR analysis "moral opprobrium of creative tax planning is not appropriate".

"In all of these difficult cases, Canadian taxpayers and tax practitioners have benefited from Justice Rothstein's informed, inquisitive and thoughtful mind," said Boidman and Fournier.

"Justice Rothstein's bold foray into the most controversial of Canadian tax issues – whether writing for a unanimous court or bravely voicing a strong dissent – conveys a clear message Justice Rothstein is at the helm of the ever evolving voyage of discovery that is the world of Canadian taxation," they added.

Paul Ryan

Chairman of the US House of Representatives’ Budget Committee

Nothing seems to have proved more difficult to achieve in the US than reform of the tax system, which has not been done since 1986. But Paul Ryan has been one of the few people to have had a significant impact on attempts to update the code, and is viewed by many as the Republican party's main man when it comes to economic policy.

His 2012 Path to Prosperity: A Blueprint for American Renewal – the Committee's response to President Obama's budget request – calls for a reduction in the corporate tax rate to 25%, funded by the elimination of corporate tax breaks, as well as a move to a territorial system of taxation.

Ryan says shifting from a worldwide system of taxation to a territorial system would "put American companies and their workers on a level playing field with foreign competitors and encourage investment and hiring in the US".

The aim of his alternative budget is to "reform the broken tax code to spur job creation and economic opportunity by lowering rates, closing loopholes, and putting hardworking taxpayers ahead of special interests".

"Lowering corporate rates is a reform that is long overdue," he added.

Unveiling his plan in March, Ryan said he was confident that the then-unknown Republican presidential nominee would adopt the measures the plan contained.

"I'm not expecting everybody to enact every little piece of this," he said. "But, yes, he [Mitt Romney] and the other candidates running for President have embraced these kinds of reforms."

Since then, of course, Romney has been confirmed as the Republicans' presidential candidate against Obama, and his selection of Ryan as his running mate in the election was as strong an indication as any of the Congressman's influence and standing within the party and the House.

Should Romney oust the president in the election, Ryan's influence is only going to increase, as he would relinquish his position in the House and move up to the role of vice president.

Pascal Saint-Amans

Director, OECD Centre for Tax Policy and Administration

As head of tax at the OECD, Pascal Saint-Amans is arguably the most important person in the tax world today.

Since stepping into Jeffrey Owens' sizeable shoes in February, he has been keen to build upon his outspoken predecessor's work, while making his own mark.

"The first few months in office have been very exciting and challenging," says Saint-Amans. "Good progress has been made to implement my priorities. With regard to getting closer to non OECD countries, I have signed cooperation agreements with South Africa and the African Tax Administration Forum and will shortly sign similar agreements with China and Brazil."

Saint-Amans has been working on fixing deficiencies in the transfer pricing rules and is pleased that the Committee on Fiscal Affairs works on the holistic approach of base erosion and profit shifting.

"Delivering on this, which includes work on transfer pricing – intangibles, safe harbours, and simplification – as well as really and finally improving the Mutual Agreement Procedure will clearly be a big challenge for the year to come. Finally, the fast changing environment in the area of exchange of information will be a great opportunity to offer a multilateral platform which can be both efficient to governments and cost saving for the financial industry."

Speaking at conferences the world over, including International Tax Review's own Tax & Transparency Forum, Saint-Amans has proven he is just as happy as Owens in giving his opinion on what needs to be done to create guidelines that work equally well for tax authorities and taxpayers around the world.

The three pillars of the OECD's work under his leadership, he says, are tax treaties, transfer pricing and the elimination of double taxation.

The OECD has faced increasing criticism in recent years from development agencies who argue that its work on transfer pricing and information exchange is failing poorer countries.

But Saint-Amans is keen to reach out to non-OECD countries and has shown himself to be flexible in embracing new ideas such as automatic information exchange. And while emerging economies outside the OECD, particularly Brazil, Russia, India, China and South Africa, are increasingly flexing their muscles, Saint-Amans and the CTPA remain at the forefront of global tax policy work.

Nicolas Sarkozy

Former President of France

It seems slightly odd to highlight the ex-French president – he left office in May – as a leading tax influence in the past 12 months. But there is one good reason – the financial transactions tax (FTT).

Whether it was his desperation to curry favour with the electorate in his drive for re-election or a genuine desire to see the banking sector pay for its part in the financial crisis is irrelevant.

In one of his final moves in office, Sarkozy forced the FTT through parliament and into law in France.

Whatever his motivation, it proved stern enough for him to act decisively in effecting a hugely controversial tax. Sarkozy rejected criticism from countries such as the Netherlands and the UK, set aside fears the FTT would see French banks relocating their transactions and their dealmakers, and jumped the gun on the European Commission's waning efforts to achieve an EU-wide FTT.

"What we want to do is provoke a shock, to set an example," Sarkozy said, after giving the FTT the green light.

The knock-on effect of France taking the lead on the FTT is undeniable.

Hungary was first to follow, announcing plans for its own unilateral FTT shortly afterwards. And, last month, at the ECOFIN council, the Commission's plans for the levy finally received sufficient member state backing to allow it to go ahead under the doctrine of enhanced cooperation.

As well as France, Germany, Austria, Belgium, Portugal, Slovenia, Greece, Italy, Spain, Estonia and Slovakia are all supporting the introduction of the tax in their jurisdictions, probably on January 1 2014.

Sarkozy's version came into force in France on August 1 this year.

Algirdas Semeta

European Commissioner for Taxation and Customs Union, Audit and Anti-Fraud

Algirdas Semeta, Lithuania's former finance minister, retains his place in the Global Tax 50 and not just for the number of words in his title. After almost three years as the Commission's top tax man, Semeta has gained a reputation as an ambitious and successful reformer.

While his biggest project, the common consolidated corporate tax base, has gone rather quiet in the last year, progress on two major indirect tax reforms are occupying the time of Semeta and his staff. The financial transactions tax (FTT) is an idea that's been kicking around for decades among socialists and radical economists, but it has rarely been kicked further than the long grass by those in power. But since Semeta came forward with a proposal to introduce an EU-wide tax on financial transactions at the end of last year, the idea has gained considerable traction. With 11 member states now looking to adopt the Commission's FTT, this once fringe idea has entered the mainstream and Semeta has found a way to make the financial sector pay for the cost of the recession, while reining in some of its most risky and reckless behaviour.

"It will bring balance and justice to our fiscal systems, by ensuring that the financial sector contributes fairly to public finances and to society," Semeta said about the FTT.The other indirect tax matter the commissioner is tackling is VAT reform. He has spearheaded the project to secure the future of the EU's VAT system by making it simpler, more robust and more efficient. After extensive consultation, strong progress has been made on implementing a one-stop shop, moving to the destination principle and setting up a quick reaction mechanism for member states to combat fraud.

"Our strategy for the reform of the VAT system takes a measured approach, to avoid any risk to national revenues or sudden upheavals for businesses," Semeta said. "The changes which will lead to a better functioning, better protected VAT system will therefore be done in a steady and gradual way, in full consultation with all interested parties."

Dan Shaviro

New York University professor; Start Making Sense blogger

Dan Shaviro is Wayne Perry Professor of Taxation at New York University School of Law. His areas of research are budget policy, entitlements, tax law and policy, and transfers, but one of his other interests is his closely-followed Start Making Sense blog, which has given him the chance to bring his views to a wider audience than his students.

"It's a good way to be able to comment more casually and informally than to my academic readership," he says.

"Unfair but balanced commentary on tax and budget policy, contemporary US politics and culture, and whatever else happens to come up," is how Shaviro describes his blog.

"Sometimes it can be a curse to live in interesting times, but sometimes it can be a blessing," he says. "You couldn't ask for a better US presidential candidate than Mr Romney, with things in the Caymans and so on."

While Start Making Sense has extended his readers beyond NYU, he believes the blog would not be as popular if US politics were different.

"One of my wishes is that the US political system returns to sanity. If it did, then I would have fewer readers."

He believes Republicans are to blame for the present situation. "Around 1994, the Republicans went crazy. I probably first noticed in about 2002. They need to return to sanity. That's not to say I'm laudatory about everything President Obama says. I go through the pluses and the minuses."

The popularity of the blog means he gets more and more calls from reporters, particularly fact-checkers. "Sometimes I don't want to be quoted because I don't want to come off as too harsh. I'm not running for office. I don't need to be confirmed."

On the burning tax question of the day in the US – when and how reform will take place - unlike many commentators, Shaviro does not believe an overhaul is imminent. In a post on Start Making Sense on October 18, he comments on a talk he gave the previous week in New York:

"The basic topic is why I don't expect major corporate and international tax reform to happen – or, if it happens, to be very stable – not just for obvious political reasons but also due to the fundamental dilemmas we face once we are forced, by the existence of the individual income tax, to sign on to entity-level corporate income taxation."

Lee Sheppard

Contributing editor to Tax Analysts

Lee Sheppard is a qualified tax lawyer, though she has not practised since the 1970s, and a contributing editor to Tax Analysts. Professionals are avid readers of her often controversial views on corporate tax, particularly in the US. Her arguments stand out for their wit and inventiveness.

"Like a designer handbag, a target company is likely to be overpriced and perhaps promise more than it delivers," Sheppard wrote on her blog on Tax Analysts website.

Sheppard is firmly in the camp that believes international corporate tax rules are out of date and need to be brought in line with the way business is conducted now, especially in light of new technologies, which allow companies to conduct business electronically.

She writes about all areas of tax law, including international taxation, transfer pricing, partnership taxation, bankruptcy questions, pensions and accounting.

In recent months, she has come out against the use of the arm's-length principle, the dominant international standard in transfer pricing.

"The members of large multinational groups of corporations are not separate economic actors. The point of vertical integration is not to have to pay arm's-length prices for some goods and services. It is a fool's errand to try to divine arm's-length prices for intra-group transactions, particularly for valuable intellectual property (IP) that is never licensed to outsiders," Sheppard wrote in an article in Forbes magazine.

"Financial accounting ignores affiliates and treats the corporate group as a single entity. But the federal income tax law treats affiliates as separate economic actors, giving multinationals free rein to determine where their profits should be taxed, or more likely, not taxed."

Nicholas Shaxson

Author, Treasure Islands

Journalist Nicholas Shaxson is the author of Treasure Islands, a book exploring the role of tax havens in the global economy. His biggest impact came this year, however, with an article in Vanity Fair investigating Mitt Romney's tax affairs, which have since dogged the Republican US presidential candidate's campaign.

If Shaxson's report helps cost Romney the election, some on the left of politics might say he has saved the world from a great evil, while the right would claim he has doomed it to Obama's socialist nightmare. Either way, he's earned his place as one of the most influential people in tax.

International Tax Review: What inspired you to investigate Mitt Romney's offshore millions?

Nicholas Shaxson: Vanity Fair read Treasure Islands and invited me to submit some article ideas. I sent them a few, and they liked the Romney one best. Hardly a surprise!

ITR: What were the most damning things your report uncovered?

NS: My article said a couple of things that really needed saying, which the US media had hitherto found itself unable to spell out.

Article after article had explored Romney's tax strategies, often getting lost in some quite serious detail, then with a disclaimer along the lines 'but he hasn't broken any laws:' then often going on to conclude that it was all 'legitimate'.

What my article pointed out in plain language was that this was nonsense. For one thing, there is typically no clear dividing line between the legal and the illegal: particularly with international corporate tax, and there exists a large grey zone between the two.

I asserted explicitly – with plenty of evidence to back it up – that Romney seems extremely comfortable wading deep into these murky grey waters between the legal and the illegal. I also made it clear that what is 'legal' is not the same as what is 'legitimate' – not at all. Think apartheid, or slavery, in their day, for a couple of extreme examples to make that point.

ITR: Do you think it will have an influence on the US election?

NS: Well, that was never my intention. Personally, my aim was to point out how rotten the whole system is, using Romney as a vivid and current example. For what it's worth, I'm pretty disappointed in Barack Obama, particularly for his closeness to Wall Street. But the reaction I got to the article was astonishing.

Trivially, I got a few vitriolic emails calling me a "Euro commie slut" and such like.

More importantly, it seemed to open some floodgates: my article was mentioned in New York Times editorials three days in a row, was being discussed all over the TV, and really got a lot of people talking. His love for secrecy, his tax gymnastics, his willingness to go beyond – and often way beyond – what is clearly legal: it all adds up to a big ugly package, which when put it together in a particular way seemed to reach a critical mass.

I'm very proud of what I achieved, not least to get Americans asking some serious questions about tax havens.

ITR: Has your book, Treasure Islands, done much to increase public awareness of tax havens and change corporate mindsets?

NS: I think Treasure Islands has played a part. It's hard to know who's reading it, but one way to get a sense of this is to watch who is following you on Twitter. A remarkably high proportion of my followers are journalists, and quite a few people in the political sphere.

Most of my sales and Twitter followers are in the UK and I do feel that while many others also deserve credit for bringing these huge issues to attention at last, Treasure Islands has undoubtedly packed a punch and put the issues out there: a kind of elaborate starter's pack for anyone wanting to get to grips with these gigantic, hugely complex issues.

ITR: What's in store for you and your tax justice work next year?

NS: Once you start looking at tax havens, your attention is inevitably drawn towards the issues of financial centres, which compete against each other in a race to the bottom to offer the world's hot money various public bads – secrecy, low taxes on capital meaning higher taxes or worse services for the poorer sections of society and an escape from financial regulation and more.

All financial centres are tax havens, to a degree. So although Treasure Islands has a huge focus on the City of London, I am paying even more attention to it now: the centre of what I call the "spider's web" of British tax havens around the world, and the epicentre of global financial mis-regulation.

One issue I'll also be looking at is whether or not the City has been good for the people of the UK as a whole. Most people think that it's self-evident that all that money must be good for the UK. It certainly is for some.

But before I worked on tax havens I spent many years researching and writing about oil-producing countries in Africa, which seem to have been unable to harness their mega-billions into real national development. I was amazed to find many of the same causes and symptoms striking countries that depend on financial centres. So that will be a big focus for me. Watch this space.

Parthasarathi Shome

Chairman, Indian Expert Committee

Parthasarathi Shome is chairman of the Indian Government's Expert Committee on General Anti-Avoidance Rules (GAAR) and indirect transfers of assets and professor, Indian Council for Research on International Economic Relations. In the past, Shome has held roles as chief economist at HM Revenue & Customs in the UK and as chief of the IMF's tax policy division, and has written various publications on tax and other economic issues. Between 2004 and 2008 he was an adviser to the Indian finance minister. Shome is clearly a man who has had an impact on the development of tax policy in India and elsewhere.

International Tax Review: What do you consider to have been your biggest influence on tax?

Parthasarathi Shome: My greatest visible influences on tax have been the two reports of the Expert Committee I chaired for the Indian Government, on GAAR and on the taxation of indirect transfers of underlying assets in India. It was nice to be conveyed from abroad, as well as from within India, that GAAR was a "thrilling" report and, when the indirect transfer report was out, that I was considered a "rock star" of taxation, if such oxymorons could be imagined.

I have had the opportunity to provide technical assistance in taxation to 35 or so countries, including my own, and in Africa, Asia, Europe and Latin America, a recent example being to lead the first international tax mission to Myanmar.

To me, influence begins with first listening and then understanding the central issue and proceeding on to solve it by slowly yet steadily breaking down barriers with some courage and grace.

Brazil, another complex economy, recognised the efforts I made there for over a decade and formally recognised my contribution [by awarding the Brazilian Government's highest civilian honour for a non-Brazilian, Commander of the Order of the Southern Cross]. I feel that I also had deep influence on tax matters in Brazil.

ITR: Do you think your Expert Committee report will have an impact on foreign direct investment (FDI) into India?

PS: The committee was a technical group and we focused on the details of tax so we might emerge with the right combination of taxation aspects.

That included reducing suboptimal business decisions generated by taxation and instead creating a level playing field for stakeholders. That should, in turn, enable the tax administration to narrow down and take up real problem cases of abusive tax avoidance.

The reviews have focused on the clarity the reports have been able to generate. If government accepts the Committee's recommendations, it should enable foreign investment.

The immediate reaction has been noticeable not only in print and visual media and analysis, but has also been reflected in the stock exchange and the rupee exchange rate which have resulted from the totality of a reform package initiated by the finance minister.

ITR: One of the concerns in the minds of investors is the tax administration. What can be done to reform it ?

PS: The tax administration should benchmark itself internationally against other tax administrations and participate in ongoing processes elsewhere. There are three pillars of reform that comprise a tripod.

First, the organisational structure has to move from regional to sectoral and functional. Thus departments should be structured on sectors such as banking, insurance, oil and gas, telephone and telegraph, and others and business taxes – corporate income tax and VAT or GST – should be included under each sector. A similar structure should be devised for individual income tax and capital gains tax.

The sectoral departments should be buttressed by functional departments such as assessment, audit and scrutiny, risk and intelligence, analysis, tax debt, legal, ICT [information and communications technology], and others from which each sectoral department should be able to "buy" services. Importantly, the structure should be able to assign accountability to officers at different levels that are clearly defined and evaluable.

The second pillar is the use of ICT in not only processing tax returns but, in particular, in developing data mining ability that would facilitate tax administration policy analysis and decision making.

The third pillar is the treatment of enterprises as stakeholders and of individuals as customers. Viable and functioning customer care centres, and the willingness and ability to solve problems through a continuing series of stakeholder dialogues, or incorporating schemes such as Time to Pay when a compliant taxpayer is in distress, are a few examples.

ITR: Taxpayers are concerned with the amount of frivolous tax notices leading to protracted litigation. How can this be improved?

PS: This is a good example of the need for international benchmarking and to take cognisance of the difference in approaches being taken in the use of several tax administration instruments through measurable and comparable indicators such as the number of litigation – including on transfer pricing adjustments – cases initiated, won, lost, the length of time spent on each, and departmental financial and staff resources being spent in ratio of the departmental budget.

ITR: What, in your view, is a practical timeline for implementation of GST and DTC?

PS: The more important concern is the nature or quality of the legislation that is introduced with, of course, speed in mind.

Bringing in a goods and services tax (GST) or Direct Taxes Code (DTC) that is not internationally comparable would not solve the challenges in prevailing tax policy design.

The gap or distance from international norms should be bridged before a meaningful GST or DTC is introduced. Otherwise a rudimentary tax mix could be introduced quickly but that might turn out to be to the detriment of improved allocation of productive economic resources and commensurate growth.

Stig Sollund

Coordinator, Subcommittee on Transfer Pricing Manual – Practical Issues

There were few more experienced officials available than Stig Sollund in 2009 when the UN Committee of Experts on International Cooperation in Tax Matters went looking for someone to lead its work on a transfer pricing manual for developing countries.

"Countries were asked to nominate members and I was picked as one of 25," Sollund says. "I already had a central role in work on the UN model convention, leading the subcommittee on PEs [permanent establishments] and I had been a longstanding member of the OECD's Working Party No 6 on transfer pricing. I was asked by other subcommittee members to be the chairman. It is not something I sought."

The mandate of the subcommittee was to produce a practical manual on transfer pricing that would be useful to developing countries.

"There was a demand from developing countries to have a practical manual on how the arm's-length principle should operate," Sollund says. "The purpose was not to set up a competing set of guidelines to the OECD."

The results of the work of the Subcommittee on Transfer Pricing Manual – Practical Issues was seen this October when the document was published and discussed during the UN committee of experts' annual meeting.

"It was a diligent and inclusive process, with the key transfer pricing people involved on the committee, and included also in the subcommittee representatives from the BRICS, business, the OECD, academia and experts from developing and developed countries from outside the Committee itself," says Sollund, director general of the tax treaty and international section of the tax law department of Norway's Ministry of Finance.

Developing countries are becoming more influential in international tax policy development, particularly in transfer pricing, as they try to build capacity to deal with the number of related-party transactions taking place through their jurisdictions because of globalisation.

The importance of the UN's transfer pricing subcommittee has increased at the same time. The Sollund-led work, though only designed to be instructive rather than prescriptive, is likely to have long-lasting effects.

Sir Martin Sorrell

Chief executive officer, WPP

Sir Martin Sorrell is the chief executive officer of WPP, the marketing and advertising multinational. Sorrell's decision to move the WPP's tax residence to Ireland in 2008 because of the UK tax system, and his subsequent decision to return the company headquarters back to the UK again, is a major example of the effect of tax policy on decisions companies make and of its impact on the British coalition government's 'Open for Business' agenda. The government has committed to ensuring that Britain has the most tax-competitive economy in the G20. WPP's return has, and is likely to, influence other companies that have moved their tax residence out of the UK in recent years.

International Tax Review: What specific tax issues prompted your decision to move WPP's tax residence to Ireland? And what prompted the planned return?

Sir Martin Sorrell: We moved our tax residence to Ireland in 2008, as a result of the then Labour government's proposals to reform the taxation of foreign profits, which we thought would have a detrimental impact. The coalition government set out very early on that it wanted the UK to be 'Open for Business' and one of their main initiatives was a promise to reform the UK's controlled foreign company (CFC) rules. The government has delivered on their promise and introduced new rules that apply from next year. With the threat of punitive CFC rules being replaced by the certainty of the new regime, we decided that the parent company should return to the UK.

ITR: Do you think the Government's 'Open for Business' agenda and its ambition to have the "most competitive tax regime in the G20" is beginning to succeed? Is WPP's decision to move back to the UK a sign that UK tax policy is working?

MS: Recently there has certainly been a steady influx of foreign based groups moving their headquarters to the UK, which we think shows that the measures, which extend beyond just corporate tax measures, are beginning to work. All of the factors you mention [CFC and patent box reform, and corporate income tax rate cuts] improve the tax competitiveness of the UK. Time will tell whether the changes make it the most competitive regime, but it is certainly very encouraging and in our view is a positive thing for the UK.

ITR: What change to the corporate tax system would you like to see implemented, if you could do so overnight? Will you be lobbying for further changes in the year ahead?

MS: We believe that probably there has been enough done to modify corporate tax rates, at least for the meantime. On income we do not think the reduction in income tax rates was necessary at the time the decision was taken to reduce the rate from 50% to 45%. A general promise that rates on income taxes would be reduced would have been sufficient, for example in the life of the parliament.

The more important initiative may have been to reduce the rate of capital gains tax, which would have a much more significant impact on SMEs and on entrepreneurial behaviour.

The creative industries in the UK, which contribute about 8% of GDP, would be much more positively impacted by such a move than reducing income tax rates. Politically, it has proven to be a difficult decision too.

Wayne Swan

Deputy Prime Minister and Treasurer, Australia

International Tax Review: You have said your name is tied to tax reform. And this is undeniable – you have overseen implementation of the carbon pricing mechanism and MRRT, the strengthening of Part IVA (GAAR) and moves to try and reduce the corporate tax rate. What do you consider to be your biggest achievement or influence in business taxation?

Wayne Swan: Our mining tax reform is a truly landmark achievement that has been accomplished in the face of intense and entrenched opposition, and will deliver lasting benefits for generations of Australians.

We are determined to leave a legacy from the mining boom in every corner of the country, and by spreading the benefits of our mineral wealth we are going to do exactly that.

By delivering a profits-based resource rent tax we ensure that miners pay more in boom times, and then less when profits are lower – a logical and sensible set of reforms.

With the additional revenue from the boom we are able to boost tax incentives for small business investment and help small business cash flow, deliver nation building infrastructure and help build the retirement savings accounts of 8.4 million hard-working Australians.

ITR: What are the top corporate tax issues you are facing right now? What is your number one priority for the year ahead?

WS: It is very important that we get our loss carry-back reforms through the parliament to help businesses take sensible risks to prosper from new opportunities in our region during this Asian century.

I'm determined to see tax reform focused on reducing the burden on viable investment for small businesses, especially in our patchwork economy where some sectors are finding it tough with a higher Australian dollar.

By providing incentives for small businesses to invest and innovate, we help them take steps to adjust to the challenges in our patchwork economy, such as the higher terms of trade.

ITR: When can we expect further developments on the proposed business tax cut?

WS: Just to put this into context, we did propose a company tax cut, but incredibly it was blocked by the Liberal Party. I remain supportive of lowering the company tax rate if the business community can agree on a way to fund it from the business tax system.

ITR: Would you say your experiences of playing rugby league have stood you in good stead for some of the tough negotiations that occur with business leaders (and particularly mining entrepreneurs) when trying to implement new tax policy?

WS: To follow your analogy, I've always been someone that is focused on the scoreboard, and for me that means delivering what we can in our tax system for hard-working Australians and businesses.

Tax reform is never easy, certainly not in Australia, but when you do the hard yards and get it done it is something a government can be proud when it delivers for the generations that follow.

Some of the most innovative reforms of the 1980s and 1990s, such as the Petroleum Resource Rent Tax, reducing the company tax rate from 46% to 30% by broadening the tax base and compulsory superannuation were met with enormous resistance from vested interests, but are accepted today as important blocks of our ongoing economic strength.

Richard Stern

World Bank

Richard Stern has been guiding the tax simplification programme at the World Bank since its inception 18 months ago. Demand is increasing among developing countries for the service.

The Global Tax Simplification Team of the Bank's Investment Climate Department (CIC) aims to:

  • Introduce a complete transfer pricing legal framework.

  • Implement detection mechanisms (risk-based auditing indicators) to identify possible TP abuse.

  • Promote capacity building and training which is critical to successful implementation and audits, especially given the complexity of this topic.

The programme is providing transfer pricing assistance in Georgia, Armenia, Bosnia, Serbia, Albania, and Thailand, in partnership with the OECD and EU. The CIC is working with the local International Finance Corporation offices on these projects, with the exception of Thailand, where CIC is working with the Bank's office.

Stern said that in recent months his team have been working on more complex issues such as advance pricing agreements and safe harbours.

"Low capacity is the biggest issue in the all countries we work in," said Stern, about the level of staff and monetary resources of the countries on CIC's books.

Stern said he was honoured, on behalf of his team, to be included in International Tax Review's Global Tax 50.

"The World Bank's tax programme is unique among tax technical assistance programmes in that it takes a growth and investment climate lens in looking at tax issues. That is, our interventions are focused on improving the tax system to improve transparency and levelling the playing field for growth and investment."


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More and more people and groups interested in tax use Twitter to relay their views around the world. It is surprising what you can learn #brevity

Sir Andrew Whitty

Chief Executive Officer, GSK

The head of GSK, the pharmaceuticals company, has been one of the few corporate leaders to address publicly issues about how multinationals manage their tax affairs.

In an interview in the Observer newspaper in March 2011, Sir Andrew (plain Andrew back then) stated that his company was committed to being a tax resident in the UK and that he had no truck with companies that move about so they can pay the smallest amount of tax.

"Call me old-fashioned," he said, "but I think you have to be something. I don't buy that you can be this mid-Atlantic floating entity with no allegiance to anybody except the lowest tax rate. You're British, you're Swiss, you're American or you're Japanese. Whatever you are, you're something. And this company is a British company."

Whitty acknowledged that while GSK had contributed much to the UK, Britain had done the same for GSK through the support of its people, government and universities.

He was scathing of news at the time that different companies were threatening to move their tax residence from the UK.

"I really believe one of the reasons we've seen an erosion of trust, broadly, in big companies is they've allowed themselves to be seen as being detached from society and they will float in and out of societies according to what the tax regime is," said Witty. "I think that's completely wrong."

"Of course we could go, in theory, anywhere for a low tax rate. But first of all, how do you know that country isn't going to change its tax rate in 10 minutes? Secondly, isn't it better to be in a country and say 'let's try and work through the difficult times and get to the good times'? If every company runs away every time there's a difficult time, how is a country ever going to emerge?

The pressure on UK company boards to consider their tax residence has lessened considerably since Whitty's remarks as the tax system has undergone substantial reform. For example, controlled foreign company rules have been changed and a patent box offering a tax exemption is being introduced. However, the impact of a CEO's views was important.

Tax has proved toxic for multinational companies in recent years.

For perhaps the first time ever, the public, as well as tax administrators have been challenging companies to explain why they manage their tax affairs the way they do.

Concepts used to reduce taxable income, such as transfer pricing, foreign tax credits and loss carryforwards, have come in for intense scrutiny from the general media and different interest groups. This has piqued the interest of the public as they try to understand the rules in place to raise money from corporate taxpayers.

Company managers have generally declined to confront these issues in public because of concern that their message will not be understood or will be twisted in some way.

Whitty has shown that coming forward to be open about such issues does not always carry the danger that many peers may suspect.

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