Download - Implications of the Revised Treaty of Chaguaramas for Tax Administrations

Implications of the Revised Treaty of Chaguaramas for Tax Administrations

• Relevant Treaty Provisions

• Administrative Issues• Specific Implications• General Implications


Relevant Treaty Provisions

• Article 32 – Prohibition of New Restrictionson the Right of Establishment

• Article 37 – Removal of Restrictions on Provision of Services

• Article 38 – Removal of Restrictions on Banking, Insurance and Other Financial Services


Relevant Treaty Provisions • Article 40 – Removal of Restrictions on

Movement of Capital and Current Transactions

• Article 44 – Measures to Facilitate Establishment, Provision of Services and Movement

of Capital



• Article 46 – Movement of Skilled Community Nationals

• Article 72 – Double Taxation Agreement

• Article 82 – Establishment of a CommonExternal Tariff

• Article 87 – Import Duties


• Article 95 – Co-operation in Customs Administration

• Article 3 of Treaty of Basseterre provides for co-ordination, harmonization and pursuance joint policies in:

(l) Income Tax Administration

(m) Customs and Excise



Administrative Issues

• Self-employed persons

Tremendous challenge to tax administrations

Tax systems need to be re-modeled

Introduce a licensing system



• Companies

Permanent Residence

Transfer pricing

Charges for common services

Management charges



• Movement of Capital Need to implement procedures

to track and record transactions

Traditional sources of information no longer available



• Harmonization of Corporate Taxation

Article 1 – Cap. Allow. Article 6 – Min. Corp. Tax

Article 2 – Interest Article 7 - Mergers

Article 3 – Losses Article 8 – Disp./Acq. Of Shares

Article 4 – Pensions Article 9 –Withholding Tax

Article 5 – Ins. Prem. Tax

Article 10 – Exp. & Res. Exps.



• Tax Coordination Fiscal erosion due to excessive

tax competition between member states;

Less employment taxes may result;

Need to look at harmonised environmental taxes.



• Tax competition Cross border shopping;

Capital flight;

Labour migration;

Re-allocation of firms;

Downward pressure on tax rates.



• Double Taxation Agreements Already addressed;

Tax administrations need to ensure that provisions are implemented;



• Simplification of Tax Structures There is a need to be tax

efficient; To many “small” taxes which are

costly to collect;

May result in bigger and costlier tax administrations;


Administrative Issues • Revenue Authority

Lack of interaction among revenue collecting agencies;

Lack of mobility of staff in Revenue Departments;

• Why a Revenue Authority?

Need to attract skilled personnel;



Statutory Body:

• Four types can be considered:

Taxation policy;

Administration of domestic taxes;

Personnel management.



Revenue Committee:


Grouping of all revenue agencies;

Consult on consistency of policy

Sharing of information.



Revenue authority:


Legally formed body;

Revenue policy;

Effective management.



Regional authority:


Legally formed body;

Revenue policy

Strategic Planning.

Legal advice;

Negotiation of tax agreements;

Dealing with difficult tax cases;


Administrative Issues • Skills of Staff

Personnel training and education;

Incentive based recognition;

Improvement in working conditions;

Highly skilled workforce;


Conclusion

Increase networking;

Be proactive in the advice that we give;


THANK YOU

Download - Implications of the Revised Treaty of Chaguaramas for Tax Administrations

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