Tax cooperation conducive to trade, investment liberalisation

Sangeetha Amarthalingam / Khmer Times No Comments Share:
Kong Vibol, the director of the General Department of Taxation, attends the SGATAR annual meeting. Supplied

Deepening tax cooperation is conducive to trade and investment liberalisation, where it is able to build a growth-friendly tax environment to shape a fair, modern and transparent international tax system, a belief expressed by the 16-member Heads of Delegations (HoDs) of the Study Group on Asian Tax Administration Research (SGATAR).

For in depth analysis of Cambodian Business, visit Capital Cambodia

The group agreed on this stand at its 48th annual meeting while acknowledging the contribution to the regional development of China’s Belt and Road Initiative (BRI).

This includes other international collaboration and multilateral networks, with the expectation its members strengthen tax cooperation, noted SGATAR in its annual meeting summary, which the Khmer Times had access to.

SGATAR was set up in 1970 to help align tax systems in the Asia-Pacific region and foster a tax regime favourable to the smooth development of trade and investment. China is the host this year while Indonesia will host the next sitting.

The HoDs, which met in Hangzhou, China, between Nov 13 and 15, agreed to enhance transparency for tax administrations by implementing transfer pricing documentation rules where applicable.

The document showed that it should be done with careful consideration of compliance costs for businesses and the administrative capabilities of tax administrations.

Transfer pricing documentations are prepared and kept by taxpayers as proof that their related party transactions are done at ‘arm’s length’, meaning it is conducted on equal terms.

The HoDs agreed to improve the effectiveness and efficiency of tax dispute resolution by implementing Action 14 of the Organisation for Economic Co-operation and Development’s Base Erosion and Profit Shifting (BEPS), and take proper measures for cross-border certainty for taxpayers to prevent disputes.

According to OECD, BEPS refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.

The HoDs also endorsed recommendations to implement common reporting standards, and encourage tax service providers to standardise their practice for better tax compliance, provide special service and enhance communication and cooperation for the providers.

During the meeting, the HoDs were given the annual work programme for 2019, which will guide the SGATAR taskforce next year.

The group also committed to supporting knowledge-sharing and best practices between the members, establish focus areas under the topic ‘ease of doing business’, consider the issue of communication with the World Bank regarding methodology of tax indicators after analysing current methodology and how to address the concerns, and explore possibilities for cooperation with other international and regional organisations.

Share and Like this post

Related Posts

Previous Article

Aston Martin still planning for the worst despite Brexit deal

Next Article

Grab introduces new business service