October 20, 2023
OECD Forum on Tax Administration agrees on action to support continued digital transformation, delivering Pillar Two and capacity building
The Organisation for Economic Co-operation and Development (OECD)'s Forum on Tax Administration (FTA) held its 16th plenary meeting in Singapore on 11-13 October 2023. The theme of the meeting was "collaboration and partnership," with a focus on three priorities:
The FTA was created in July 2002 by the OECD's Committee on Fiscal Affairs, with the aim of promoting dialogue between tax administrations and identifying good tax administration practices. At the time of the plenary meeting, the FTA comprised 53 members, with the heads and representatives of 43 of the members attending the meeting. Representatives of business and the profession (including EY) attended part of the event.
The Statement of outcomes: 2023 FTA Plenary Meeting released at the conclusion of the plenary meeting outlined the agreed-upon actions and commitments made by the FTA in three key areas, with the FTA members agreeing to:
Digital transformation of tax administration
The FTA recognized that digital transformation of tax administration can provide significant economic benefits and reduce the compliance burden on taxpayers. According to the statement, this has the potential to generate more than €130b in additional revenue for each one-percent increase. The FTA agreed to work together with business and academic stakeholders on a set of projects to:
Work will begin on the projects following approval after the FTA meeting in Singapore, with progress to be discussed at the 2024 plenary meeting.
Implementation of the Two-Pillar Solution and Tax Certainty
The FTA members discussed the challenges and opportunities of implementing a global minimum tax. It had previously agreed that a standardized return would enable the collection and exchange of Pillar Two information. The FTA highlighted the publication a manual on multilateral mutual agreement procedures and advance pricing arrangements earlier this year. The next FTA Tax Certainty Day will be held virtually on 14 November.
Tax capacity building
The FTA recognized the importance of making sure all tax administrations can benefit from its work, and highlighted its range of capacity-building programs, including:
The plenary group also discussed emerging risks facing tax administrations, and matters connected with maintaining and building trust, tax debt management, assistance in tax collection, tax fraud, tax crimes, and progress on tax transparency awareness.
Future FTA plans
The FTA agreed the projects on Tax Administration 3.0 are expected to begin in December 2023. The 2024 FTA Plenary Meeting will be held in Greece.
For additional information with respect to this Alert, please contact the following:
Ernst & Young LLP (United Kingdom), London
Ernst & Young Belastingadviseurs LLP, Amsterdam
Ernst & Young LLP (United States), Global Tax Desk Network, New York
Published by NTD's Tax Technical Knowledge Services group; Carolyn Wright, legal editor