Finance Ministers scrutinise tax base erosion in APEC economies

Vu Nhu Thang, director of the International Cooperation Department under the Ministry of Finance, sheds light to the tax aspects in the agenda of the upcoming APEC 2017 Finance Ministers’ Meeting (FMM 24) to take place in the ancient town of Hoi An in the central province of Quang Nam on October 21, 2017.

                          Dr. Vu Nhu Thang

Base erosion and profit shifting projects aim to deal with transfer pricing. Why has Vietnam chosen this content as one of the four priority topics for discussion at FMM 24?

The initiative was introduced by Vietnam in late 2016, after consulting with other APEC members. Anti-transfer pricing scores high not only on Vietnam’s agenda, but also for global economies, including developed economies and international organisations, and particularly G20 countries, the Organisation for Economic Cooperation Development (OECD), and the World Bank.

In 2015, G20 member states encouraged other economies outside the group to take part in and share BEPS-related experience. In the same year, OECD presented 15 steps to combat transfer pricing, called BEPS. This is a global issue, so when Vietnam as the host country of APEC 2017 recommended placing the issue as a priority topic for discussion at FMM 24, the motion saw general consent.

What actions have Vietnam and other APEC members taken to ensure efficiency of the discussion about BEPS at the upcoming FMM 24?

To prepare for FMM 24 on October 21, as the host country, the Vietnamese Ministry of Finance has successfully convened the APEC Finance and Central Bank Deputies’ Meeting (FCBDM) in this February, the APEC Senior Financial Officials’ Meeting (SFOM) this May, and joined hands with the World Bank, OECD, and the Asian Development Bank (ADB) to host many international conferences covering the four priority topics for FMM 24, including the BEPS issue.

The conclusions of the FCBDM, SFOM, and recommendations at the aforementioned international conferences will be submitted to the APEC Ministers in the upcoming FMM 24.

What BEPS content was included in the FCBDM and SFOM that will be submitted to the FMM 24?

Representatives of 21 APEC economies agreed that due to different development levels as well as different legal systems, it is impossible to simultaneously carry out all the 15 actions on anti-transfer pricing that the OECD has recommended, but APEC members have proven proactive in expediting minimal and essential actions.

Even with these minimum and essential actions, as the economies feature different development levels, the members have reached a consensus that it is important to set up a close cooperation mechanism for the optimal efficiency of BEPS implementation.

 

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By Manh Bon