OECD Tax Chief on ‘Red-Eye’ Flight for Super-Treaty Signing

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By Ben Stupples

Feeling pushed for time? Try being Pascal Saint-Amans this week.

The OECD’s tax chief will take a red-eye flight from Washington, D.C., to Paris on June 6 to make a landmark ceremony the next day as part of the organization’s global tax policy reform.

Saint-Amans traveled to the U.S. capital to participate in the OECD’s international tax conference and will make final remarks to close it at 5 pm local time, according to the conference’s agenda.

In a June 5 text message to Bloomberg BNA, Saint-Amans confirmed that his travel plans will allow him to “deliver the concluding remarks” at both the Washington conference and the Paris ceremony.

“He won’t miss the ceremony, provided that his plane flies,” an OECD spokesman told Bloomberg BNA in a June 5 telephone call. “It’s obviously been important for him to be in Washington, too.”

Global Tax Treaty

The Paris signing ceremony is for the OECD’s multilateral instrument, a kind of super-treaty allowing multiple changes at once to the global tax system that derive from the organization’s policy reform.

The multilateral instrument, or MLI, is the final part of the Organization for Economic Cooperation and Development’s 15-action plan against multinational companies using tax avoidance strategies.

Many of the OECD’s actions to curb base erosion and profit shifting will force countries to amend tax treaties, and the MLI aims to reduce the amount of time that would usually take.

If two countries adopt the same action from the BEPS project that results in treaty changes, such as a wider definition of a foreign entity’s taxable presence, the treaties will change through the MLI.

Saint-Amans told the OECD conference June 6 that said that 67 countries are planning to sign the MLI, which number doesn’t include China’s signature on behalf of Hong Kong. Nine additional countries plan to sign letters of intent June 7.

Saint-Amans said more countries are working to announce their support of the MLI, including Mauritius, whose finance minister recently wrote a letter to Saint-Amans indicating it would sign a letter of intent within a few weeks. Mauritius, an island nation in the Indian Ocean, has been accused of tax secrecy by some tax transparency advocates.

Absences in Paris

While most of the OECD and Group of 20 countries are expected to sign the MLI, the U.S. has limited interest in the provisions and is not expected to appear at the ceremony as a result. At the OECD’s international tax conference, Saint-Amans described the absence of the U.S. on June 7 as “a pity.”

The U.K.’s ministers will not travel to Paris, meanwhile, due to the country’s June 8 general election. Mike Williams, a senior U.K. civil servant who has chaired the group overseeing the MLI, will appear instead at the OECD’s headquarters.

“From the U.K.’s point of view, the most important provision in the MLI is probably the adoption of mandatory binding treaty arbitration,” Bill Dodwell, Deloitte’s head of U.K. tax policy, told Bloomberg BNA in a June 5 telephone interview.

The measure, part of the OECD’s action on more effective dispute resolution mechanisms, will result in a “better level of discussion” with the parties involved, focusing on the “right issues,” he added.

“We have relatively few cases that read that level of arbitration, but it’s important we have it.”

— With assistance from Kevin A. Bell, Alex M. Parker, and Sony Kassam in Washington.

To contact the reporter on this story: Ben Stupples in London at bstupples@bna.com

To contact the editor responsible for this story: Penny Sukhraj in London at psukhraj@bna.com

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