In December, Professor Emeritus Hugh Ault and Professor Diane Ring participated as experts in a three-day workshop on “Administration of Tax Treaties and Addressing Base-Eroding Payments” held in Berlin and sponsored by the United Nations Financing for Development Office (FfDO) and the International Tax Compact. The workshop, co-organized with the participation of representatives from more than 20 developing countries in Africa, Asia, Eastern Europe, and Latin America, examined the impact of domestic tax law and tax treaties on a developing country’s ability to appropriately and effectively tax transactions and activities in its jurisdiction.
“All countries struggle to ensure that their tax bases are not eroded through aggressive tax planning and reporting practices pursued by multinational taxpayers,” said Ring. “But particularly for developing countries, protecting the tax base from such erosion is crucial to providing their governments with the revenue necessary to finance their domestic infrastructure expenditures. This ‘domestic revenue mobilization’ is a key part of the work of the FfDO.”
The workshop was grounded in prior FfDO tax work for developing countries in which Professors Ault and Ring had participated, including contributions to the “UN Handbook on Selected Issues in Administration of Double Taxation Treaties for Developing Countries.” During the first two days of the program, a panel of international tax experts, including Ault and Ring, provided an overview of the key issues for protecting the tax base, including the content, negotiation, and use of tax treaties as well as the significance of the underlying domestic tax law in each jurisdiction. The third day focused on issues of particular interest to developing countries, as well as various options for changes in domestic legislation and tax treaty policy to counter base-eroding payments.
The workshop included practical case studies, discussion of country experiences, and consideration of good practices, with attention towards assisting countries in disseminating useful information both among themselves at the workshop, and at home within their tax administrations. The workshop will be followed by a FfDO project to produce “Practical Portfolios” which will help developing countries assess their tax systems and implement necessary changes aimed at tax base protection.
Ring, an internationally-known expert in international taxation, corporate taxation, and ethical issues in tax practice, is a Professor of Law and the Dr. Thomas F. Carney Distinguished Scholar at Boston College Law School. She is the author of many articles and co-author of case books on corporate taxation, international taxation, and ethical problems in federal tax practice.
Ault, who recently retired from active teaching duties, is a specialist in taxation with an emphasis on international tax issues. He has written numerous books and articles,, including the third revised edition of his book Comparative Income Taxation: A Structural Analysis (Kluwer/Aspen). Ault was formerly Senior Advisor to the Organization for Economic Cooperation and Development (OECD) Centre for Tax Policy and Administration in Paris (1997-2012). He is serving as a Consultant to the United Nations Financing for Development Office (FfDO), involved in work on strengthening developing country tax systems.