First OECD Global Forum on VAT
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The First OECD Global Forum on VAT was held in Paris on November 7-8, 2012. The CIAT Director for Planning and Institutional Development, Mr. Socorro Velazquez, represented the Executive Secretary at this event.
The primary objectives of this first Global Forum on VAT were: 1) offer an opportunity for sharing VAT policy analysis and experience, for identifying best practices and strengthening international co-operation among representatives from industrialized, emerging and developing countries; and, 2) discus concerns related to double taxation, unintended/non taxation, transfer pricing and exchange of information regarding VAT.
There were over 200 participants from all corners of the world who represented ministries of finance, customs and tax administrations, private sector and international organizations.
In general the meeting was very informative to all. It was a good “hear and learn exercise.” Judging from the active participation and comments, participants were pleased with the discussions and the information provided. There were some discussions on VAT principles but these were kept within the context of the applicable presentation (e.g., if a country presented their system, reference would be made if it was based on the DESTINATION or ORIGIN principle).
Excellent presentations were made on comparative information that addressed country VAT rates, percent of GDP collected, etc. There were ample discussions on the administrative as well as the policy side of VAT. One opinion was that VAT should never be used to make social policy; simply collect the required legal amounts according to the tax laws, then redistribute accordingly through social programs.
The private sector presentations were also of much interest. These were made through the BIAC organization corporate representatives (e.g., Shell Oil, Time-Warner and others). The Time-Warner representative made a presentation on producing a movie in a particular country and VAT considerations. (Basically, make it anywhere where VAT is the lowest; you can always paint in the Eiffel Tower.) A strong point made by the private sector was that, at their business level, evasion or avoidance was not an objective. Their main interests were: 1) simplification; 2) a standard reporting process; and, 3) expeditious refunds on exports.
The subject of harmonization was addressed regarding the European Union. Currently, there is harmonization regarding reporting standards. However, not rates. The private sector officials voiced strong opinions regarding the need to look for common reporting standards throughout the world. The OECD International VAT/GST Guidelines were discussed at length. It appears that the greater majority of countries are adopting these guidelines. Under this topic, the need for a VAT treaty, limiting taxing rights, was also discussed.
In summary, it was a very good meeting with lots of beneficial information provided to country representatives. The delegate from Japan offered to host the 2nd Global Forum on VAT next year in Tokyo.