OECD Taxation Working Papers N. 48 – Carbon pricing design: Effectiveness, efficiency and feasibility. An investment perspective

OECD Taxation Working Papers N. 48 – Carbon pricing design: Effectiveness, efficiency and feasibility. An investment perspective. Carbon pricing helps countries steer their economies towards and along a carbon-neutral growth path. This paper considers how the design of carbon pricing instruments affects their effectiveness, efficiency and feasibility. Design choices matter both for taxes and Emissions Trading Systems (ETSs). Considering the role of carbon price stability for clean investment, the paper shows how volatile carbon prices can cause risk-averse investors to forego clean investment that they would have undertaken with more stable prices. The paper then evaluates the effectiveness and efficiency of policy instruments to stabilise carbon prices in ETSs, which tend to produce more volatile carbon prices than taxes. The paper analyses the auction reserve price in California, the carbon price support in the UK, and the market stability reserve in the EU ETS. Considering feasibility, the paper discusses the tax (or emissions) base, how revenue use can affect support from households and firms, and administrative choices. (Florens Flues and Kurt van Dender, 22 Jun 2020).

OECD – TAX DATABASE. KEY TAX RATE INDICATORS. Update June 2020

OECD – TAX DATABASE. KEY TAX RATE INDICATORS. Update June 2020. This summary presentes comparative information on a range of statutory tax rates and tax rate indicators in OECD countries, encompassing personal income tax rates and social security contributions, corporate income tax rates and value-added taxes. These indicators provide a baseline of information on tax settings in 2019 and in early 2020.

OECD Economics Department Working Papers N. 1407

This paper investigates the factors that shape governments’ capacity to collect revenue. To do so, it analyses how tax revenue responds to tax rates using evidence from a panel of 34 OECD countries over 1978-2014. The estimations show that the response of revenue to rates weakens as rates become higher, confirming the existence of a hump-shaped relationship between tax revenue and rates for corporate income taxation and providing a new contribution by analysing value-added taxation. Importantly, the estimated responses of revenue to tax rates vary, in some cases very strongly from an economic perspective, depending on country-specific policies and framework conditions. In particular, the corporate income tax revenue-generating potential of hiking the effective rate shrinks much more quickly in more open economies than in more closed ones. Tax revenue is found to be more responsive to tax increases in countries where the tax authorities have more resources. The investigations also cover personal income taxation. They point to diminishing revenue returns of increasing the effective marginal tax rates that apply at substantially above-average income levels. (By Oguzhan Akgun, David Bartolini and Boris Cournède, 2019).

OECD – The COVID-19 crisis creates an opportunity to step up digitalisation among subnational governments

OECD – The COVID-19 crisis creates an opportunity to step up digitalisation among subnational governments. Recent decades have seen rapid growth of advanced digital technologies, including high-speed computing, big data, artificial intelligence, the internet-of-things and blockchain. This “digital revolution” creates significant opportunities for all levels of government to improve the delivery of public goods and services, and to raise more and better revenue. This is particularly important in the context of the COVID-19 crisis. Fighting a pandemic while minimising the associated economic costs calls for appropriate digital infrastructure for the design and enforcement of containment measures, as well as to ensure access by the population and enterprises to critical government services. After all, subnational governments (SNGs) account for about 40% of government spending on average in OECD countries; they also play an important role in the delivery of key services that are at the heart of the policy actions being taken to slow the spread of the pandemic, including on health care and social protection. By Luiz de Mello, OECD, and Teresa Ter-Minassian, OECD Fiscal Network.

OECD – TAX ADMINISTRATION RESPONSES TO COVID-19: ASSISTING WIDER GOVERNMENT.

OECD – TAX ADMINISTRATION RESPONSES TO COVID-19: ASSISTING WIDER GOVERNMENT. 1. In response to the COVID-19 crisis, many tax administrations have taken on new roles to assist in the provision of wider government support. In many cases these have entailed responsibilities not normally provided by tax administrations, such as making support payments to citizens or providing new forms of analytical assistance to other parts of government. The speed with which such measures have to be implemented presents a number of challenges but also offers opportunities for learning lessons and for improving processes going forward, including as regards resilience and agility as well as closer working with other government agencies.

A OCDE e a Receita Federal do Brasil (RFB) convidam os contribuintes para colaborar com questões de preços de transferência relacionadas ao desenvolvimento de regras de safe harbours e outras considerações de comparabilidade

Como parte da fase de implementação do projeto conjunto de preços de transferência entre a OCDE e o Brasil, o Secretariado da OCDE e a Receita Federal do Brasil (RFB) lançaram uma pesquisa buscando colaboração pública para informar o trabalho relacionado ao desenvolvimento de safe harbours e outras medidas de simplificação e que possam contribuir para aumentar a segurança jurídica em matéria tributária.

A OCDE e a Receita Federal do Brasil (RFB) convidam os contribuintes para colaborar com questões de preços de transferência relacionadas ao desenvolvimento de regras de safe harbours e outras considerações de comparabilidade

Como parte da fase de implementação do projeto conjunto de preços de transferência entre a OCDE e o Brasil, o Secretariado da OCDE e a Receita Federal do Brasil (RFB) lançaram uma pesquisa buscando colaboração pública para informar o trabalho relacionado ao desenvolvimento de safe harbours e outras medidas de simplificação e que possam contribuir para aumentar a segurança jurídica em matéria tributária.

OECD Secretary-General Tax Report to G20 Finance Ministers and Central Bank Governors. Saudi Arabia. July 2020

OECD Secretary-General Tax Report to G20 Finance Ministers and Central Bank Governors. Saudi Arabia. July 2020. Since I last reported to you in February 2020, the world has undergone a cataclysmic change. The emergence of the COVID-19 pandemic has upended daily life as countries attempt to protect the health of their citizens and mitigate the economic fallout from the ongoing crisis. In responding to this crisis, the tax agenda is more relevant than ever. First, fiscal measures – in particular tax-related measures – have played and will continue to play a critical role as countries continue to navigate their way through the COVID -19 crisis. Following a request of Saudi Arabia’s G20  Presidency, the OECD outlined measures taken by countries in its report Tax and Fiscal Policy in Response to the Coronavirus Crisis: Strengthening Confidence and Resilience, presented during the virtual meeting of the G20 Finance Ministers and Central Bank Governors, on 15 April 2020. Effective tax policy responses in the recovery phase will provide countries with essential tools to face the upcoming challenges arising from the current crisis. The OECD stands ready to deliver tax policy recommendations by spring 2021. Second, there remains a pressing issue that has been on the table for more than seven years: reaching a multilateral, consensus-based solution to the tax challenges arising from the digitalisation of the economy among st the 137 members of the G20/OECD Inclusive Framework on BEPS (the G20/OECD Inclusive Framework). Although practical challenges as a result of the pandemic have inevitably affected the pace of progress, technical work on a solution continues to progress well under both Pillar One (establishing a new nexus and reallocating taxing rights) and Pillar Two (ensuring a minimum level of taxation). Since January, and the adoption of an outline of Pillar One based on an OECD Secretariat proposal for a Unified Approach, 11 building blocks have been developed technically by the G20/OECD Inclusive Framework. Work on Pillar Two has also progressed well, with the aim of delivering blueprints for each Pillar for the October meeting of G20 Finance Ministers. Failure to reach an agreement comes with serious risks of escalating tax and trade tensions, which would further undermine the global economy. Contrary to what has been reported publicly, all members are committed to the current negotiation even though some are of the view that a pause at the political level is needed. We encourage you all to remain fully engaged and advance the work so that, when the COVID-19 crisis is over and some of the electoral deadlines have passed, a political agreement can be reached. We look forward to delivering a detailed blueprint of Pillar One in October, embedding needed simplification measures to the architecture of the Pillar that was agreed in January 2020. This blueprint could serve as the basis for both a public consultation, so that all stakeholders can input and comment, and a final round of  negotiation with a view to agreeing a consensus based solution. The work to finalise Pillar Two is also well advanced and is increasingly relevant as public tolerance of tax avoidance by companies is expected to reach an historic low in the aftermath of  the COVID-19 crisis. By ensuring that a minimum level of tax will be paid on all profits made by multinational enterprises, Pillar Two offers another powerful tool to address BEPS and also establishes a floor to tax competition. Work is underway to finalise the technical design of Pillar Two, which will be submitted to the G20/OECD Inclusive Framework at its plenary meeting in October 2020. Reaching a solution to the tax challenges arising from digitalisation will only be achieved with your strong leadership and clear political support. International co-operation is needed more than ever to provide tax certainty to businesses during very uncertain times and to prevent an unnecessary exacerbation of the already daunting economic challenges posed by the pandemic.

OECD issues recommendations on implications of the COVID-19 crisis on cross-border workers and other related cross-border matters

The COVID-19 pandemic has forced governments to take strict and in some cases unprecedented measures to protect their citizens, economies and societies, such as restricting or stopping travel and implementing strict quarantine requirements. In this difficult context, most countries are putting stimulus packages in place, including measures to support employment, for example, taking on the burden of unpaid salaries on behalf of companies suffering from the economic downturn resulting from the COVID-19 pandemic. As a result of these restrictions, many cross-border workers are unable to physically perform their duties in their country of employment. They may have to stay at home and telework, or may be laid off because of the exceptional economic circumstances.