This week, USCIB convened the tenth annual OECD International Tax Conference, in Washington, D.C. June 10-11, for a timely discussion of global tax policies and their impact on international trade and investment. The sold-out event, produced with the OECD and BIAC, has become a huge draw for global companies and those involved in crafting international tax policies.
As the OECD’s Base Erosion and Profit-Shifting (BEPS) project draws to a close, policymakers, business representatives and tax practitioners gathered to take stock of the OECD’s efforts to rewrite global tax rules. The BEPS project’s goal is to craft new rules that tax profits where economic activity is generated, without imposing undue compliance costs on taxpayers.
“As we enter the home stretch in the BEPS exercise, global companies and national tax authorities are naturally thinking about implementation as well as next steps,” said Carol Doran Klein, vice president and international tax counsel with USCIB. “Our conference is more valuable than ever as a resource to learn about and discuss transfer pricing, prospects for U.S. tax reform, and many other topics. The OECD is of course a critical resource in this area.”
Discussions on the first day of the tax conference included sessions on “BEPS: Current State of Play,” “U.S. Tax Reform and BEPS,” “Transfer Pricing in Line with Value Creation,” and a keynote address by former U.S. Congressman David Camp (PwC).
Former Congressman David Camp (PwC) stresses the importance of U.S. tax reform at the 2015 OECD International Tax Conference in D.C.During Camp’s speech, he stressed the need for the United States to reform its tax code, explaining that the U.S.’s high statutory corporate tax rate makes it difficult for American companies to remain competitive, and it incentivizes those companies to reinvest their profits abroad rather than at home. On the BEPS process, Camp noted that concerns about double taxation on cross-border investment continue to be serious issues for the United States. He urged attendees to address these concerns before the BEPS process is over without rushing to a hasty conclusion.
“From a business standpoint, we really must have tax reform,” Camp said.
During the conference, speakers from governments involved in the BEPS negotiations, including Robert Stack, deputy assistant U.S. Treasury secretary for international tax, provided their assessments of the overall success of the project.
“It is clear that the BEPS has been very challenging, we hope the OECD and countries will commit to continue to improve the process and outcomes,” said Bill Sample (Microsoft), chair of USCIB’s Taxation Committee.
Legislators weighing the impact on domestic tax reform
The conference takes place as American policymakers consider how to make U.S. tax law more internationally competitive. On June 10, Rep. Paul Ryan (R-WI) said in an interview with Bloomberg BNA: “The question is: Can we take a couple of steps in the right direction, particularly with international tax laws and international tax rules? Ours are really anti-competitive. Can we do some things to fix that so we can make American businesses more competitive?”
As the BEPS process comes to a close at the end of this year, the U.S. business community will be looking to its government to make the U.S. tax code more conducive to international trade and investment.
“BEPS is going to change the landscape of international tax. If Congress wants to shape that landscape, they should be paying attention, following the discussions and making their views known. Congress staking out a position soon would be helpful” USCIB’s Klein told CQ News.
On June 10, the Business and Industry Advisory Committee to the OECD released a position paper that identifies the business community’s primary concerns with the BEPS process.
On the second day of the OECD tax conference, participants covered “Interest Deductibility and CFC Rules,” “Permanent Establishments and Profit Attribution to Permanent Establishments,” “Treaty Abuse,” “Dispute Resolution,” looked ahead to “BEPS: Post-2015,” and listened to a keynote address by Sunita Manik of the South African Revenue Service.
USCIB and BIAC will continue to provide constructive input into the BEPS process as the project reaches its final stages at the end of this year.