HLP on International Financial Accountability Transparency and Integrity for Achieving 2030 Agenda (FACTI Panel)

Tax Cooperation Policy Brief 16, July 2021

Article 12B – A tax treaty solution by the UN Tax Committee for taxing digital incomes

By Rajat Bansal

Taxation of income of multinational enterprises engaged in digitalised businesses by source or market jurisdictions is currently the most important challenge before the international tax community. The current membership of the United Nations Tax Committee in April 2021 finalised a tax treaty solution to address this challenge. This brief explains the rationale for coming up with a particular solution of inserting a new Article in the United Nations Model Tax Convention, its merits and how it can be beneficial for all countries, especially the developing ones.

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SouthViews No. 223, 14 July 2021

Financial integrity for sustainable development: Importance of developing country joint action on tax, corruption and money-laundering 

By Dr. Ibrahim Mayaki

Countries are beginning to realize that the landmark agreement on the Sustainable Development Goals will be unrealized if financing is not found for the agenda. Much of that financing can be found if illicit financial flows are stopped. In March 2020, the Presidents of the United Nations General Assembly and Economic and Social Council convened a High-Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (FACTI Panel) to review global cooperation and recommend further actions by the international community as a contribution. Dr. Ibrahim Mayaki, the Co-Chair of the FACTI Panel, outlines the measures that the FACTI Panel recommended to combat tax abuse, corruption and money-laundering. He emphasizes the importance of developing countries taking a leading role in proposing solutions, and the value of inclusive international institutions. The text below is based on remarks that were made at a briefing to the Group of 77 and China in Geneva in April 2021, jointly organized by the FACTI Panel Secretariat and the South Centre. The Panel’s full report can be read at: http://www.factipanel.org/report.

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Tax Cooperation Policy Brief 15, June 2021

Conceptualizing a UN Multilateral Instrument

By Radhakishan Rawal

Recent changes to the United Nations (UN) Model Tax Convention have resulted in provisions that are more advantageous for developing countries in raising revenue through international taxation, i.e. taxation of foreign income. These include taxation of income from automated digital services, software payments, capital gains and others. Normally, these would be incorporated into bilateral tax treaties through time-taking negotiations. A UN Multilateral Instrument (MLI) provides a speedy manner for updating multiple tax treaties through a single negotiation. This will help developing countries in collecting revenue more quickly. This Policy Brief discusses the possible structure of such an MLI.

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Tax Cooperation Policy Brief 14, June 2021

The Tax Sovereignty Principle and Its Peaceful Coexistence with Article 12B of the UN Model Tax Convention

By Kuldeep Sharma, ADIT (CIOT, UK)

Article 12B of the United Nations (UN) Model Tax Convention (MTC) provides developing countries with a practical and easy way to administer policy solutions for taxing the digital economy, in particular income from Automated Digital Services. It merges seamlessly with the existing provisions of the UN MTC and it is completely aligned and coexistent with the Tax Sovereignty Principle.

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SC Submission, June 2021

Submission to the Special Session of the General Assembly on Challenges and Measures to Prevent and Combat Corruption and Strengthen International Cooperation

South Centre, 28 May 2021

The South Centre submission to UNGASS2021 highlights the need for strong inter-institutional and cross-sectorial coordination and more effective and open government tools.  The UNGASS2021 should support the implementation of the FACTI Panel recommendations as means to enhance States’ effort to combat corruption. 

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SouthViews No. 219, 31 May 2021

Opportunities and Challenges: Tax Cooperation and Governance for Asia-Pacific Countries

 By Sakshi Rai

An informal technical meeting was organised on April 8th 2021 by the Secretariat of the High Level Panel on International Financial Accountability, Transparency and Integrity for Achieving the 2030 Agenda (FACTI Panel) for tax officials from the Asia-Pacific, to discuss the relevance of the Panel’s recommendations in the context of the region as well as to familiarise tax officials with its final report.

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SCTI Submission, November 2020

Comments to the FACTI Panel Interim Report

The South Centre Tax Initiative (SCTI) submitted its comments on the Interim Report of the High Level Panel on Financial Accountability Transparency and Integrity for Achieving the 2030 Agenda (FACTI Panel). The Report analyzed the “gaps, vulnerabilities and impediments present in the current international systems related to financial accountability, transparency and integrity issues” and found that “international systems can help countries prevent the drain of resources from development, contributing to achieving the 2030 Agenda, but that they lack co-ordination, leave gaps and may overlap and even conflict with each other. The shortcomings are systemic and require systemic responses.”

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SCTI Submission, May 2020

Comments to the FACTI Panel on improving cooperation in tax matters

The South Centre Tax Initiative (SCTI) would like to draw the attention of the Financial Accountability Transparency and Integrity (FACTI) Panel to the following aspects of improving international tax cooperation:
(1) legal procedure to upgrade the UN Tax Committee into an intergovernmental body;
(2) Right of even Inclusive Framework Members to take unilateral measures;
(3) Need for comprehensive scope of Pillar One;
(4) Primacy of  Undertaxed Payments and Subject to Tax rules in Pillar Two;
(5) Need for clear and administrable rules for dispute prevention.

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