On the face of it, taxpayers should have been afraid, very afraid, of the meeting that took place in Delhi in January this year between the heads of the revenue departments in Brazil, Russia, India, China and South Africa (collectively termed the BRICS). The meeting saw the five committing to sharing best practices, helping with each other with capacity building and anti-avoidance measures, identifying non-compliance activities and implementing effective exchange of information.
Where will this cooperation go from here? Already, some of these jurisdictions, such as Brazil, India and China have different views to the 34 member states of the OECD on transfer pricing. Brazil, for example, sets fixed margins rather than applies a hierarchy of methods and China is pushing the ideas of location savings and location specific advantages as being important when taxpayers set their prices.
The last thing taxpayers will want is for these five jurisdictions to break away from or ignore OECD-led negotiations on international tax guidelines, and follow their own path. Or even different countries within the group to have their own refinements.
Along with other non-members, the five have been included in the discussions on base erosion and profit shifting which the OECD is running at the behest of the G20. However, it will be up to national governments if they want to implement anything that comes out of those talks. The approach of the BRICS will be followed with much interest.
|The Global Tax 50 2013|
|View the complete list||Next »|
© 2019 Euromoney Institutional Investor PLC. For help please see our FAQ.