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ITIC Bulletin
December 2014
International Tax and Investment Center Contents
Editor’s Note
ITIC Participation in Worldwide
Events
Some articles throughout this Bulletin
are linked to longer articles on ITIC’s
website. These articles are specified
in blue font and underlined for easy,
“one click” access to the full article.
Please note that some articles are
limited for Sponsors only and are
password protected. Please email
Diana McKelvey to obtain the log-in
information.
Recent ITIC Publications
News on Board Members,
Advisors, and Staff
Academy of Public Finance
Regional Tax Forums
Myanmar Update
Middle East/North Africa Update
Kazakhstan Update
KMTA Update
Ukraine Update
Combatting Illicit Trade
Iraq Update
Libya Update
Upcoming ITIC Events
Due to the holiday
period, the next
issue of the ITIC
Bulletin will be
published in early
February 2015.
21st Annual ITIC Board of Directors’
Meeting held in London
Asia-Pacific Update
Russia Update
Season’s Greeting
and Happy New
Year from ITIC
The
International
Tax
and
Investment Center (ITIC) held its
21st annual Board of Directors’
meeting in London on 30 October.
In addition to the annual Board
of Directors’ meeting, a briefing
and dinner was organized at the
House of Lords for ITIC’s Board, sponsors, and guests. The Board meeting
marked the start of ITIC’s third decade of promoting tax, economic and
investment reforms. To view the special edition Bulletin reporting on the
meeting, click here.
ITIC Issues Paper Available
At the annual Board of Directors’ briefing on 29 October, ITIC released
a new Issues Paper co-authored by Dave Hartnett (former Permanent
Secretary of HMRC and ITIC Board member) and Hafiz Choudhury (ITIC
Senior Advisor), titled, Tax Administration Priorities in Emerging and
Frontier Countries. A copy of the paper is available on ITIC’s website here.
ITIC Signs Cooperation Agreement with Brazilian Partner
ITIC and the Grupo de Estudos Tributários Aplicados (GETAP) have agreed to cooperate
on joint programs in Brazil to advance their common research and educational missions as
non-governmental organizations (NGOs). The fundamental aim of the joint GETAP-ITIC
programs is to foster mutual understanding and trust between the Brazilian Government and
taxpayers. Continue reading
ITIC Bulletin ♦ December 2014
2
In Memoriam: Bill Frenzel
Our dear friend and colleague Bill Frenzel passed away on 17 November. As the founding Chairman
of the Executive Committee of the Board of Directors, Bill provided leadership, guidance and wisdom
to ITIC, and to me personally, for the past 22 years. As a strong advocate for pro-growth tax policies
and free trade, he was a true champion for ITIC’s vision, mission and programs. Bill participated in
our early missions (1992) to Kazakhstan and Russia that led to the creation of ITIC, and continued his
active involvement on the Executive Committee until last month.
Knowing of Bill’s illness, at our 30 October meeting, Dr. Miller and Mr. Witt paid tribute to Bill
Frenzel’s service as a founding Director and Chairman of ITIC’s Executive Committee. By unanimous
consent, the Board approved the following resolution: The Board of Directors of the International Tax
and Investment Center is grateful for the services of Bill Frenzel as a founding Director and Chairman of the Executive
Committee. His commitment to the founding principles of ITIC, particularly pro-growth tax policies and free trade
have guided the organization for over 21 years. As a result of Bill’s leadership and tireless efforts, ITIC has grown from
an idea to a well-respected international NGO working with over 85 countries. The Board has asked management to
establish a living legacy to Bill Frenzel and establish a program in his name to continue his commitment to the promotion
of pro-growth tax policy and free trade.
U.S. House of Representatives Remembers Bill Frenzel
On 19 November, the U.S. House of Representatives dedicated one hour of floor debate to the life of Bill Frenzel, and in
particular, praised his great accomplishments in the areas of trade, tax, and U.S. budget policy. Continue reading
Bill Frenzel: ITIC Chairman Emeritus Honored with Mexican Order of the Aztec Eagle for
Promotion of Free Trade
On 20 October, ITIC Chairman Emeritus of the Executive Committee, The Honorable William Frenzel, was honored
by the Ambassador of Mexico to the United States, Eduardo Medina Mora, with the Mexican Order of the Aztec Eagle,
the highest award Mexico confers on foreigners. This award, presented by Mexican Ambassador Mora on the 20th
anniversary of the North American Free Trade Agreement (NAFTA), recognizes the work done by Mr. Frenzel in helping
to move the NAFTA Bill through the U.S. House and Senate. Continue reading
Obituaries About Mr. Frenzel
•
Bill Frenzel, Key Voice on Economics in House, Dies at 86 – The New York Times
•
Bill Frenzel, Minnesota Republican and fiscal authority in the U.S. House, dies at 86 – The Washington Post
•
Obituary: Republican Bill Frenzel; represented west metro in Congress - Star Tribune
ITIC Expands Senior Management Team
At the Board of Directors’ meeting, ITIC President Daniel Witt introduced Blake Marshall, who
joined ITIC as a new Vice President. Blake has extensive experience working in developing and
emerging markets as Executive Vice President of the US-Russia Business Council and as Senior Vice
President of Hill+Knowlton Strategies. Witt added, “Blake brings extensive program management
and communications experience to help ITIC further strengthen and expand our programs. Blake is a
seasoned internationalist with hands-on experience developing and implementing programs.”
Blake’s hiring was recently featured in the International Tax Review. To view the full article, click here.
Blake joins current ITIC Vice President Irene Savitsky, who oversees ITIC’s finance and administration.
2015 ITIC Calendar of Events Released
To view the calendar, click here.
ITIC Bulletin ♦ December 2014
Second Annual International
Conference on Shadow
Economy and Taxation
The second annual International Conference on Shadow
Economy and Taxation Conference will be held on 2224 April 2015 in Bucharest, Romania. ITIC Program
Advisor, Liz Allen, will co-chair the event.
First Annual Conference
The first annual International Conference on Shadow
Economy and Taxation was held in April 2013 in Vilnuis,
Lithuania. A special edition ITIC Bulletin reporting on
the conference is available here.
ITIC Participation in
Worldwide Events
ITIC Participates at 2nd Kazakhstan-US
Convention
On 10 December, ITIC President Daniel Witt made a
presentation on the panel session titled, “KazakhstanGateway to Central Asia,” at The 2nd Kazakhstan-US
Convention in Washington, DC.
3
South Caucasus Project – Progress Report
As previously advised, we have been cooperating with
The European Geopolitical Forum with the South
Caucasus Project, which is examining a possible role
for economic cooperation in attenuating the conflict in
Nagorno-Karabakh and the associated territories.
Upcoming MEC International / Windsor
Energy Group Events in London
MEC International Ltd is a global advisory and business
development firm focused principally on the Middle East.
Other regions where they are active include Sub-Saharan
Africa and Central Asia. ITIC and MEC have cooperated
on joint programs over the years, including an event in
London to launch ITIC’s second Iraq taxation booklet, a
roundtable to discuss the Taxation of Islamic Financial
products study, as well as many educational programs for
officials from Central Asia.
Recent ITIC Publications
The following publications have been released by ITIC
and are available on ITICnet.org (click the links below):
ITIC Special Study – Global Taxes
and International Taxation: Mirage and
Reality by Professor Richard Bird
ITIC Participates in IMF Fiscal Affairs
Department 50th Anniversary Conference
ITIC President Daniel Witt participated at the Fiscal
Affairs Department’s 50th Anniversary Conference: Fiscal
Affairs, Past and Future on 5 December at the IMF
Headquarters in Washington, DC.
ITIC Senior Advisor Participates at Annual
International Fiscal Association
ITIC Senior Advisor Hafiz Choudhury recently
participated at the 68th annual International Fiscal
Association (IFA) on 12-17 October in Mumbai, India.
Mr. Choudhury participated as a speaker on the panel on
“Taxation and Non-Tax Treaties.”
ITIC Participates at IMF/World Bank Panel on
Promoting Natural Resource Transparency
On 6 October, Mr. Karl Schmalz,
ITIC Senior Advisor, participated
on a panel at a Joint IMF-World
Bank Seminar on The New Fiscal
Transparency Code and PEFA
(Public Expenditure and Financial
Accountability) Framework on “Promoting Natural
Resource Transparency.”
ITIC Issues Paper – Tax Administration Priorities in
Emerging and Frontier Markets by Messrs. Dave Hartnett
and Hafiz Choudhury
ITIC Issues Paper – The Brisbane
G20 and Cairns Communiqué and
Recent Developments in the Forum
on Tax Administration: Implications
for Business by Dr. Jeffrey Owens
[Dr. Owens’ paper was also featured
in the International Tax Review.
Viewed additional information here].
ITIC Issues Paper – Extending the G20 Tax Mandate by
Dr. Jeffrey Owens [Further information can be viewed
here].
ITIC Bulletin ♦ December 2014
News on Board Members,
Advisors, and Staff
4
Professor Sijbren Cnossen Delivers Keynote
Presentation in Moscow
Welcome New ITIC Directors
•
Ms. Omleen Ajimal, Squire Patton Boggs
•
Mr. Alan Butler, Diageo
•
Mr. Donato Del Vecchio, BAT
•
Mr. Richard Inch, Tullow Oil
•
Ms. Myrtle Jones, Halliburton
•
Mr. Alexander Kryvosheyev, JTI
•
Mr. James Schreiter, ExxonMobil
New Senior Advisors Elected
Mr. Allen Bruford
Former Deputy Director, Compliance
and Facilitation Directorate, World
Customs Organization
Dr. Benjamin Diokno
Professor of the School of Economics at
the University of the Philippines
Mr. Sumit Dutt Majumder
Former Chairman of the Central
Board of Excise and Customs of the
Government of India
Mr. Karl Schmalz
Former Assistant General Tax Counsel,
ExxonMobil Corporation
Dr. Suthad Setboonsarng
Former Deputy Secretary General,
ASEAN
ITIC Senior Economic Advisor, Professor Sijbren
Cnossen, visited Moscow on 27 November 2014 to give
a presentation to the Russian Chamber of Commerce on
Coordinating Indirect Taxes in the Eurasian Economic
Union and Tax Policy Issues in Russia.
ITIC Senior Economic Advisor Publishes
Paper on African VAT
In the wake of various Africa Tax Dialogues in Pretoria
(Centurion), Cape Town, Kampala, Accra, Abuja and
Arusha, as well as the recently launched Academy of
Public Finance for African Tax Officials (which held
its first course on VAT in Pretoria in March 2014), ITIC
Senior Economic Advisor Professor Sijbren Cnossen
published a paper on Mobilizing VAT Revenues in African
Countries.
Avoiding and Resolving Tax Disputes in India
ITIC Distinguished Fellow, Dr. Jeffrey Owens, was
recently featured in the 13 October edition of Tax Notes
International, with his paper, titled, “Avoiding and
Resolving Tax Disputes in India.”
His paper compares the experience of India with that of
the other BRICS and selected OECD countries with a
particular focus on the issue of mandatory arbitration. To
download a copy of the full paper, click here.
Blake Marshall Featured in New Publication:
Costs of a New Cold War
ITIC Vice President Blake Marshall contributed to a new
book, titled, Costs of a New Cold War: The U.S.-Russia
Confrontation over Ukraine, edited by Paul J. Saunders.
Blake’s chapter, “Russia, Ukraine, and U.S. Economic
Policy,” is available here. The full book can be viewed
here.
ITIC Bulletin ♦ December 2014
Comments by ITIC Honorary Co-Chairman
Donald Johnston to the Conference of the
Top 500 Chinese Enterprises
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Africa Tax Dialogue Held in Arusha
ITIC Honorary Co-Chairman Donald Johnston spoke at
the Conference of the Top 500 Chinese Enterprises in
Chongqing, China on 3 September 2014. To view his
remarks, click here.
Academy of Public Finance
The Academy of Public Finance is a public/private initiative
between the International Tax and Investment Center
(ITIC), the Institute for Austrian and International Tax
Law at the Vienna University of Business and Economics
(WU), EY, the International Finance Corporation of the
World Bank, and the African Tax Institute.
Recent Courses Held
•
VAT Workshop -- Moscow, Russia
•
Excises Workshop -- Astana, Kazakhstan
•
Transfer Pricing -- Addis Ababa, Ethiopia
Upcoming Advisory Board Meeting
On 21 January 2015 in Vienna, the Academy of Public
Finance Advisory Board will meet in Vienna at the
Institute for Austrian and International Tax Law, Vienna
University of Economics and Business.
The 2014 Africa Tax Dialogue, hosted by the Tanzania
Revenue Authority, was held on 15-17 July in Arusha.
Over 115 participants from 15 African countries attended
the meeting. Presentations from the meeting are available
in the Africa Tax Dialogue library on ITIC’s website.
Special Edition Bulletin Published
The special edition Bulletin reporting on the meeting was
published in September. The report can be viewed here.
2015 Africa Tax Dialogue
The next Africa Tax Dialogue is planned for 17-19
November 2015 in Maputo, hosted by the Mozambique
Revenue Authority.
Asia-Pacific Tax Forum Held in Hanoi
Regional Tax Forums
Eurasia Tax Forum Held in Vienna
The 11th annual Asia-Pacific Tax Forum was held on 1-3
October in Hanoi, hosted by the Ministry of Finance of
Vietnam. Presentations from the meeting are available in
the Asia-Pacific Tax Forum library on ITIC’s website.
APTF featured in Vietnamese Media
The tenth annual Eurasia Fiscal Experts’ Seminar was
held on 8-10 July on the campus of the Vienna University
of Economics and Business. Presentations from the
meeting are available in the Eurasia Tax Forum library
on ITIC’s website.
Special Edition Bulletin Published
The special edition Bulletin reporting on the Seminar was
published in September. The report can be viewed here.
2015 Eurasia Tax Forum
The 11th annual Eurasia Tax Forum will be held on 30
June - 2 July in Brussels, at the headquarters of the World
Customs Organizations.
•
Vietnam TV-1
•
Nhan Dan Online
Forthcoming Bulletin
A special edition Bulletin reporting on the meeting will
be published in early January 2015.
2015 Asia-Pacific Tax Forum
The 12th annual Asia-Pacific Tax Forum will be held on
5-7 May 2015 in Delhi, hosted by the Indian Council for
Research on International Economic Relations.
ITIC Bulletin ♦ December 2014
Middle East/North Africa Held in Riyadh
The fifth annual Middle East/North Africa Tax Forum
was held on 11-13 November in Riyadh, hosted by the
Department of Zakat and Income Tax of Saudi Arabia.
Presentations from the Forum are available in the
Middle East/North Africa Tax Forum library.
Forthcoming Bulletin
A special edition Bulletin reporting on the meeting will
be published in January 2015.
Forum Featured on DZIT Website
To view the Department of Zakat and Income Tax’s
coverage of the meeting, click here.
2015 MENA Tax Forum
The sixth annual MENA Tax Forum is scheduled for
10-12 November 2015 in Qatar, Doha, hosted by the
Ministry of Finance.
Asia-Pacific Update
ITIC Meets with Lao PDR Ministry of Finance
On 7 October, ITIC President Daniel Witt met with The
Honorable Bounnam Chounlaboudy, Deputy Director
General of the Tax Department of the Lao PDR Ministry
of Finance, to discuss Lao PDR’s continued participation
with the Asia-Pacific Tax Forum (APTF).
India: Tax Administration Reform
Commission (TARC) Reports
Over the past few months, the Tax Administration Reform
Commission (TARC) of the Government of India, chaired
by long-time ITIC friend and former Distinguished Fellow
Dr. Partho Shome, released their second and third reports
(all reports are available for download here).
6
ASEAN Excise Tax Study Group Meets in
Hanoi
On 30 September, before the start of the 11th annual AsiaPacific Tax Forum, the ASEAN Excise Tax Study Group
met in Hanoi. Ministry of Finance representatives from
Cambodia, Malaysia, Myanmar, Thailand, and Vietnam
attended along with APTF and ITIC Program Advisors
Rob Preece, Leigh Obradovic, and Oliver Salmon (also
a Senior Economist at Oxford Economics based in
Singapore). ITIC President Daniel Witt also participated.
The main purpose of the meeting was to review and
discuss the final draft of the Excise Tax in ASEAN: A
guide to reform ahead of AEC 2015 that will be published
in January 2015.
Excise Tax in ASEAN: A guide to reform
ahead of AEC 2015
The final product of the Study Group, “Excise Tax in
ASEAN: A guide to reform ahead of AEC 2015,” will
be published in early 2015. This resource manual is a
result of over two years of active engagement between
key Ministry of Finance policymakers and excise tax
administrators from all 10 member states and the APTF
expert team. The project commenced at the ninth annual
APTF meeting held in 2012 in Manila.
Myanmar Update
Third Meeting of the Myanmar Natural
Resources Taxation Working Group Held
The second report covers Customs Administration reform
and Inter- and Intra-Agency exchange of information.
The third report covers the following topics: impact
assessment, tax base and taxpayer base expansion, and
risk or compliance management.
ITIC organized the third meeting of the Myanmar Natural
Resources Taxation Working Group in Nay Pyi Taw on
9-10 October 2014.
ITIC Bulletin ♦ December 2014
ITIC Senior Advisor Meets with Myanmar
Internal Revenue Department
ITIC Senior Advisor Hafiz Choudhury recently travelled
to Myanmar to visit with officials from the Internal
Revenue Department (IRD). More information on Hafiz’s
meetings has been shared directly with project sponsors.
Hafiz Choudhury and Director General of the Internal Revenue
Department, U Min Htut (far left), discuss the key policy choices
made regarding the SCT Law.
Middle East/North Africa
Update
Taxation of Islamic Finance Project Update
By Hafiz Choudhury, Senior Advisor, ITIC
ITIC is delighted to announce the completion of Phase II
of the research project on cross-border tax implications
of Islamic Finance (IF) transactions. The project started
in 2011, soon after the initial MENA Tax Forum in Doha,
with an initial paper on the subject. The discussants
on the topic and other participants raised a number of
questions that highlighted differential treatment across
jurisdictions and the need for a thorough examination of
the challenges and options faced. Conference participants
repeatedly mentioned in other feedback sessions that this
topic merited much further, in-depth analysis. Also, given
the problems caused by, there was much greater need for
coordination and sharing of experience by administrators
and policymakers. Phase I of the project looked at four
of the most common Islamic Finance transactions, and
reviewed the relevant domestic legislation in several
MENA jurisdictions, as well as in the UK and in Malaysia.
The work of Phase II was to extend the analysis to cross
border transactions, and also to consider the indirect tax,
mainly VAT, treatment of IF transactions. Phase II work
was conducted by the same combined team of Mohamed
Amin, Salah Gueydi and Hafiz Choudhury, who worked
mainly through desk research, supplemented by a remote
team that carried out the detailed survey of tax treaties.
Tax Treatment and International Standards
Part I of the Phase II report focused on the international
direct tax treatment of Islamic Finance (IF) cross border
transactions. The focus was on the tax laws and tax
7
treaties of selected MENA and Muslim majority countries
mostly covered by the Phase I report. The tax regimes of
IF transactions in Turkey, Saudi Arabia and Qatar were
considered in detail along with a very detailed survey
of the tax treaties concluded by Malaysia, Turkey and
Saudi Arabia to determine whether or not such treaties
have dealt with IF, and if so, in what way. In addition,
the approaches taken by the UN and OECD Model
Conventions in dealing with IF were analyzed to assess
the approaches taken in dealing with IF, to identify the
policy issues and challenges they raise and to make
proposals to address them. This report shows that neutral
tax treatment of IF transactions, as compared to their
conventional equivalents, is the international standard.
This principle was adopted in the countries where IF
is practiced and where an IF specific tax regime exists
such as Malaysia, Turkey, Saudi Arabia and Qatar as
well as in the UN model convention. The study noted
that the OECD model did not address tax issues of IF
arrangements, even though a number of OECD members
have introduced, or are in the process of introducing, tax
regimes for IF transactions. The conclusion drawn is that
tax issues of cross border IF transactions still need to be
studied in a more comprehensive way taking into account
the approach followed (legal or economic), the policy
objective to be pursued (tax neutrality) and the list of
typical IF arrangements. Phase III of the IF study project
should look more closely to a more comprehensive set of
IF transactions (i.e. includes Musharaka and Mudaraba)
and deal in more details with the issues such as treaty
access for IF arrangements (taking into account the work
of OECD on partnerships), permanent establishment
and IF arrangements and characterization of the income
from IF transactions, especially with regard to treatment
dividends or interest income.
VAT/GST Issues
Part II of the report covered the VAT/GST issues involved
in IF transactions. The analysis looked the core principles
relevant to VAT and Islamic Finance by creating an outline
of common conventional finance transactions which
approximate the economic effect of the four transactions
examined in Phase I. Each “pair” of similar transactions
were then contrasted with one another to show the way
a typical EU style VAT would impact such transactions.
The study then examined the choices made by a few
jurisdictions and how VAT would apply to Islamic finance
transactions that have similar economic consequences
to the conventional transactions. The goal was to make
recommendations regarding best practice for indirect tax
systems that wish to accommodate Islamic finance. The
conclusions were that IF transactions could be divided
into those that were very similar to conventional finance
transactions, peripheral transactions associated with an
ITIC Bulletin ♦ December 2014
IF structure and IF transactions that had a very different
structure to a conventional transaction. Depending on the
nature of the transaction different VAT considerations
were needed to achieve neutrality. Further work is
necessary to establish guidelines at transaction level.
Both parts of the Phase II report were presented at the fifth
annual MENA Tax Forum, in Riyadh on 10-13 November.
Forum participants agreed that work on Phase III should
commence immediately.
8
Bill on Deoffshorization
On 11 November 2014, Deputies approved the first
reading of the bill on deoffshorization.
Note: Additional memos regarding the
deoffshorization can be viewed here and here.
bill
on
Tax Maneuver Update
The following articles are password protected and only
available to ITIC Sponsors.
“Rosneft” has suggested to refuse carrying out the
proposed tax maneuver in the Oil Branch which was
approved by the State Duma in the first reading. It was
planned that the reform would bring 500 billion rubles
to the 2016-2017 budget; however, it would reduce
profitability of oil processing.
Russian Federation - President Address to
the Nation on 4 December
Category Euro-5 Fuel Excises Discussed in
State Duma
Russia Update
On 4 December, Russian Federation President Vladimir
Putin delivered the annual Presidential Address to the
Federal Assembly. Sponsors’ attention is invited to the text
of President Putin’s speech, in particular, the treatment
of the locus of responsibility in regulatory policy, the tax
freeze 2015-2019, and the further tax amnesty. We shall
monitor implementation in the light of the Government’s
follow-up meeting this week.
Maneuver in Price
On 2 December, Mr. Alexander Khloponin, Vice-Premier
of the Russian Federation, declared that retail networks
charge commissions not from the price of manufactured
products but from the price of manufactured product plus
excise tax (i.e. from the state payments which have nothing
in common with the price of manufactured products).
New Tax to Petroleum Industry Workers
Khanty-Mansiysk autonomous district can introduce into
State Duma a draft bill on experiment in the petroleum
industry consisting in the change of MET (Mineral
Extraction Tax) to Tax on Financial Result (TFR) for pilot
fields. This draft bill is likely to be introduced via the
Committee on Budget and Taxes by the end of the year.
Amendments to Tax Code Relating to
Foreign Companies
On Tuesday, 25 November, President of the Russian
Federation, Vladimir Putin, signed a bill into law
that requires controllers to inform tax authorities of
membership in foreign companies. The news was posted
on the President’s official web page.
On 5 November, the bill on Category Euro-5 Fuel Excises
being lifted for 1 ruble per liter was discussed by the State
Duma Budget and Taxes Committee. If the bill passes, the
cost of gasoline is expected to grow by 14-15%. The bill
proposes to amend the bill on tax maneuvers, which is in
currently in its second reading.
Draft Budget Approved for 2015-2017
The Government of the Russian Federation has managed
to avoid the introduction of a sales tax. According to the
Minister of Finance, Anton Siluanov, the Government did
not view it as a tool that would increase tax proceeds.
Government has abandoned the idea of
returning the sales tax
On 18 September in Moscow, Minister of Finance Anton
Siluanov announced the Government has abandoned the
idea of returning to utilizing a sales tax.
Minister of Finance announces tobacco
excise tax increase
The Russian Federation Finance Ministry’s proposal for
a sharp increase in tobacco excise taxation for the years
2015-2017 has been revised to a more gradual approach
and reducing the risk of a “tax shock” that would risk
destabilizing the legal market.
ITIC Bulletin ♦ December 2014
Kazakhstan Update
The following articles are password protected and only
available to ITIC Sponsors.
Kazakhstan Tax System - Risk Management
and Enforcement
As earlier advised, ITIC, in cooperation with HMRC and
the British-Kazakh Law Association, organized a program
of consultations on comparative practice at the request of
the Kazakhstan State Revenues Committee (SRC) and
the Supreme Court in London 1-4 December. The issues
involved are of the highest importance to investors and
officials as Kazakhstan introduces a new fiscal risks
management system, to be rolled out during 2015-2016.
Energy Charter Conference held on 26-27
November in Astana, Kazakhstan
The Statutory Session of the Conference adopted the
Astana Declaration of the Energy Charter Process for
Global Energy Architecture 2015-2019 which seeks full
implementation of the Energy Charter Treaty and global
expansion of the Energy Charter Process.
New Head of State Revenues Department
Mr. Madi Takiev has been appointed as Head of the State
Revenues Department of Atyrau Oblast.
Note: More information on the State Revenues Department
structure is available here.
Consultative Program in London held for
Kazakh Officials
On 29 November – 4 December, ITIC arranged a
Taxation Compliance and Enforcement: Policy, Law
and Administration consultative program for the State
Revenues Committee of the Ministry of Finance and
Supreme Court of the Republic of Kazakhstan in London.
State Revenues Committee Priority Issues
Based on ITIC’s 21 years of cooperation under the
Memorandum of Understanding and Cooperation that was
jointly signed by ITIC and the Ministry of Finance of the
Republic of Kazakhstan, ITIC’s Almaty office received
the official letter from the State Revenues Committee
listing the priority administration issues for 2015.
9
Mme. Galiya Makazhanova Presentation
Featured in Petroleum Magazine
We are pleased to share with you an article featuring
Mme. Galiya Makazhanova’s presentation, “On Legal
Precedents in the Consideration of Tax Disputes involving
Subsurface Users” that was published in the Kazakhstan
monthly magazine “Petroleum,” a popular weekly
magazine among oil and gas companies.
President Nazarbayev State of the Nation
Address
On 11 November, President Nazarbayev delivered his
“State of the Nation” Address, Nurly Zhol (Bright Path),
somewhat ahead of time and to the ruling Party rather
than the Parliament.
Draft Package of Changes and Amendments
to the Tax Code
The Draft Package of Changes and Amendments to the
Tax Code was passed on 6 November by Majilis of the
Parliament of the Republic of Kazakhstan.
WTO - Accession of Kazakhstan
Following Kazakhstan’s agreement with the EU on
9 October, prospects seem brighter for a successful
conclusion of the Accession process by the end of 2014,
subject to the current round of bilateral negotiations with
the USA (and no subsequent “spoiling” by the Russian
Federation).
Chairman Yergozhin Interview
Mr. Daulet Yergozhin gave
an interview to Tengrinews
Agency where he spoke about
the newly created State Revenue
Committee of the Ministry
of Finance of the Republic of
Kazakhstan incorporating ExTax and Ex-Customs Committees, as well as some of the
responsibilities of the abolished Financial Police Agency
and its operation.
ITIC Bulletin ♦ December 2014
Pre-Court Settlement of Tax Disputes
Discussed
At the joint meeting of the National Chamber of
Entrepreneurs (NCE) of Kazakhstan, headed by Mr.
Timur Kulebayev (Head of NCE and the State Revenues
Committee (SRC) of the Ministry of Finance of
Kazakhstan) and Mr. Daulet Yergozhin (Chairman of the
SRC MF), the issue of pre-court settlement of tax disputes
was discussed.
Foreign Minister Idrissov urges ‘Great Gain’
Philosophy
Shortly after official meetings with Mr. John Kerry,
U.S. State Secretary, on further strengthening the USKazakhstan strategic partnership relationship and
having received the full support from the U.S. State for
Kazakhstan WTO accession, Kazakh Foreign Minister Mr.
Erlan Idrissov participated at the Expanding Economic
Connectivity in Greater Central Asia Conference in New
York City on 23 September 2014.
10
E-Audit Program
As advised on 29 October, ITIC conducted a program of
consultations and workshops in Astana and Atyrau with
the State Revenues Committee HQ and Atyrau Regional
Office during the period 4-7 November 2014.
Ukraine Update
Financial Times Article of Interest: Ukraine
Anders Aslund, a longtime friend and noted expert on the
Russian and Ukraine economies, had an op-ed featured
in the Financial Times titled, “Marshall’s postwar logic
holds true in Ukraine today.”
To view a copy of the article, click here.
Combatting Illicit Trade
Illicit Trade Discussed at Mexico SAT Event
in Veracruz
KMTA Update
Kazakhstan State Revenues Committee
Professional Development 2015
Sponsors will be aware of the restructuring of the
Kazakhstan fiscal agencies initiated on 6 August 2014,
and the subsequent establishment of the State Revenues
Committee (SRC), which combines the functions of Tax,
Customs and Investigation/Enforcement.
Kazakhstan Tax System Development
The First Regional Forum on Illicit Trade held by the
Mexico Servicio de Administración Tributaria (SAT),
in conjunction with the OECD, provided an excellent
opportunity for officials from all areas of enforcement
from Mexico, the United States, and Canada.
Excise Products Illicit Trade and Revenue Loss
Presented by ITIC at Interpol Conference
At Interpol’s 2014 International Law Enforcement IP
Crime Conference in Hanoi, Vietnam, ITIC President
Daniel Witt presented recent ITIC studies on the illicit
trade of excisable products and revenue loss.
In the framework of the 2014 Kazakhstan Minerals
Taxation Academy (KMTA) e-audit workshop in Astana
and Atyrau on 4-7 November, a short consultation
was held with Mr. Daulet Yergozhin, Chairman, State
Revenues Committee (SRC), Ministry of Finance of the
Republic of Kazakhstan. At the meeting, Mr. Yergozhin
outlined some planned tax administration issues that are
of interest.
WCO announces the results of its first global
operation against illicit trade in tobacco
To view the WCO results, click here.
ITIC Bulletin ♦ December 2014
Iraq Update
Iraq Taxation Working Groups Meet in
Riyadh
11
Documents Available in Libya Library
All documents relating to the Libya working group
documents have been posted in the Libya Library (projectspecific password required) on ITIC’s website.
International
Organizations Update
EBRD 2014 Transition Report: Innovation in
Transition - The Role of the Firm
The 26th meeting of the Iraq Taxation Working Groups
was held in Riyadh, Saudi Arabia, ahead of the fifth
annual Middle East/North Africa Tax Forum.
Iraq Working Groups Meet in Dubai
On 14 October, ITIC convened a meeting of the Iraq
Petroleum, Oil Service and Customs working groups in
Dubai. ITIC President Daniel Witt chaired the meeting
and ITIC Senior Advisor Reggie Mezu lead the discussion
on the progress of the 2014 work plans and the initial
plans for 2015.
Upcoming Iraq Working Group Meetings in
Dubai
Meetings with senior officials from the PCLD of the
Ministry of Oil, Ministry of Finance, General Commission
of Taxation, and General Commission of Customs, are
being planned on 21-23 January in Dubai:
•
22 January - Iraq Customs Working Group
•
23 January - Iraq Taxation Working Groups
More information on the meetings, including the draft
agenda and presentations, will be sent directly to working
group members and posted in the Iraq Library (password
protected) on ITIC’s website.
Documents Available in Iraq Library
All documents relating to the Iraq working groups have
been posted in the Iraq Library (project-specific password
required) on ITIC’s website.
Libya Update
Next Working Group Meeting
The next meeting of the Libya Petroleum Taxation
Working Group will be held on 26 January in Paris, hosted
by Total. More information on the meeting will be sent
directly to working group members.
The Transition Report 2014, launched on 18 November at
the European Bank for Reconstruction and Development
(EBRD) headquarters in London, focuses particularly on
how individual companies across the transition region
innovate.
Guidelines for Multinational Enterprises in
the Minerals Sector
At an OECD-supported event in Beijing on 24 October,
the Chinese Chamber of Commerce of Metal Minerals,
in cooperation with GIZ and Global Witness, launched
a set of guidelines intended to provide a roadmap for
responsible business conduct of Chinese multinational
enterprises (MNEs) operating overseas in the minerals
sector.
OECD News
•
Revised calendar for stakeholder consultation
•
OECD bolsters relationship with Ukraine
•
OECD/G20 Releases Base Erosion and Profit
Shifting Project Explanatory Statement
Macro-Economic Policy: The Role of
Infrastructure in the Caucasus and Central
Asia Countries
Recently we drew sponsors’ attention to the 11
November address, Path to the Future,by Kazakhstan
President Nazarbayev and the significant role assigned to
infrastructure investment and development (as well as to
innovation).
ITIC Bulletin ♦ December 2014
12
Upcoming ITIC Events
22 January - Iraq Customs Working Group Meeting, Dubai
23 January - Iraq Taxation Working Groups Meeting, Dubai
26 January - Libya Petroleum Tax Working Group Meeting, Paris
10 March - Diplomatic Dialogue Luncheon for Africa, House of Lords, London
12 March - Diplomatic Dialogue Luncheon for Asia, House of Lords, London
March (TBC) - Brazil Tax Workshop with GETAP, Brasilia, Brazil
17 April - Inaugural Global Tax and Trade Lecture and reception (on eve of spring meetings of IMF and World Bank),
Washington, DC
22-24 April - Second Annual International Conference on the Shadow Economy and Taxation, Bucharest, Romania
5-7 May - 12th Annual Asia-Pacific Tax Forum, Delhi, India
30 June - Annual Board of Directors’ Luncheon, House of Lords, London
30 June - 2 July - 11th Annual Eurasia Tax Forum, Brussels
2 November - Board of Directors’ Briefing, Reception and Dinner, London
3 November - Board of Directors’ Meeting, London Offices of Statoil
10-12 November - Sixth Annual Middle East/North Africa Tax Forum, Doha, Qatar
17-19 November - Africa Tax Dialogue, Maputo, Mozambique
ITIC Vision
ITIC Mission
ITIC aims to be recognized globally as a fiscally-focused
network organization with a respected sponsor base
and presence across key non-OECD jurisdictions that
promotes education and programs for the benefit of all
its stakeholders.
ITIC’s mission is to encourage pro-growth tax, trade and
investment policies in non-OECD countries by facilitating
mutual understanding and trust between business and
government through the ITIC neutral table, based on high
quality analyses, policy studies and capacity building
programs.
Edited by: Diana McKelvey, ITIC Washington
1800 K Street, NW, Suite 718, Washington, D.C. 20006
Tel: (1) (202) 530 97 99 / Fax: (1) (202) 530 79 87 Washington@iticnet.org / www.ITICnet.org
Almaty • Astana • Baghdad • Baku • Bangkok • Dubai • Kiev • London • Manila • Moscow • Nay Pyi Taw •
São Paulo • Washington, DC