Jiri Nekovar President of CFE Global pressure in taxation policy

Global efforts to recover taxes The exchange of information between tax administrations – 119 countries – activity of OECD Anti-money laundering act – activity of OECD Base Erosion and Profit Shifting – activity of OECD / G-20 Aggressive tax planning – activity of EU Taxation of savings – activity of EU FATCA – activity of the U.S.A. with a global impact Inconsistency in definitions of intangible assets between UN and OECD in relation to “transfer pricing” and new activities of BRIC GhanaGlobal pressure in taxation policy February 2014Jiri Nekovar 2

BEPS – Action plan of OECD Action 1 - Address the Tax Challenges of the Digital Economy Action 2 - Neutralise the Effects of Hybrid Mismatch Arrangements Action 3 - Strengthen CFC Rules Action 4 - Limit Base Erosion via Interest Deductions and Other Financial Payments Action 5 - Counter Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance Action 6 - Prevent Treaty Abuse Action 7 - Prevent the Artificial Avoidance of PE Status Action 8 - Assure that Transfer Pricing Outcomes are in Line With Value Creation/ Intangibles Action 9 - Assure that Transfer Pricing Outcomes are in Line With Value Creation/ Risks and Capital Action 10 - Assure that Transfer Pricing Outcomes are in Line With Value Creation/ Other High- Risk Transactions Action 11- Establish Methodologi es to Collect and Analyze Data on BEPS and the Actions to Address It Action 12 - Require Taxpayers to Disclose Their Aggressive Tax Planning Arrangement s Action 13 – Re-examine Transfer Pricing Documentation Action 14 - Make Dispute Resolution Mechanisms More Effective Action 15 Develop a Multilatera l Instrument GhanaGlobal pressure in taxation policy February 2014Jiri Nekovar 3

BEPS – Foreign direct investment 2010: 5.11 % of global foreign direct investment (FDI) points to Barbados, Bermuda and the British Virgin Islands (Germany 4.77 %, Japan 3.76 %) The British Virgin Islands is the second largest investor to China, where it brought 14 % of all FDI (Hong Kong 45 %, USA 4 %) The largest foreign direct investors to Russia – Cyprus (28 %), British Virgin Islands, Bermuda and Bahamas GhanaGlobal pressure in taxation policy February 2014Jiri Nekovar 4

Countries struggle to attract foreign investment Foreign investment as of the end of 2012 in the Netherlands and Luxembourg amounted to USD 5.8 tn - More than in the U.S.A., UK and Germany in total.  According to OECD, the Netherlands accumulated foreign investment amounting to USD 3.5 tn, but only USD 573 bn ended in the “genuine” Dutch economy.  The G–8 and G-20 countries have put taxes on the first place in their agendas.  Starbucks, Amazon, Google in the United Kingdom and Apple in the U.S.A. pay little in taxes by the parliamentary committee. GhanaGlobal pressure in taxation policy February 2014Jiri Nekovar 5

G-20 vs. OECD G % of global GDP Over 75 % of global trade 2/3 of world population OECD 65 % of global GDP About 63 % of global trade 20 % of world population GhanaGlobal pressure in taxation policy February 2014Jiri Nekovar 6

G-20 Countries of OECDNon-OECD countries Country GDP per capita (USD) Share in the world trade (% GDP) Country GDP per capita (USD) Share in the world trade (% GDP) South Korea30, Saudi Arabia31, Germany41, Russia22, Mexico18, South Africa10, United Kingdom 37, Republic of China9, Canada41, Indonesia4, Italy33, India3, France36, Argentina18, Turkey18, Brazil12, Australia45, Japan35, USA51, GhanaGlobal pressure in taxation policy February 2014Jiri Nekovar 7

G-20 Non-OECD countries Countries of OECD Countries of EU GhanaGlobal pressure in taxation policy February 2014Jiri Nekovar 8

St. Petersburg - September 2013 Globalization in taxes – Globalization in tax consultancy G-20 – Base Erosion and Profit Shifting CFE General Assembly with participation of representatives of AOTCA and WAUTI Adoption of the idea of The Global Tax Advisers Co-operation Forum GhanaGlobal pressure in taxation policy February 2014Jiri Nekovar 9

Confédération Fiscale Européenne 25 countries of Europe West African Union of Tax Institutes 15 countries of West Africa Asia Oceania Tax Consultant’s Association 19 countries of the Asia and Oceania Region Self-regulating organizations in the world GhanaGlobal pressure in taxation policy February 2014Jiri Nekovar 10

GhanaGlobal pressure in taxation policy February 2014Jiri Nekovar 11 Conclusion  Rights of taxpayers and the Taxpayer Charter model  Result of the CFE – AOCTA – STEP cooperation – participation of 35 countries  Invitation to WAUTI to take part in the Taxpayer Charter project  Paying taxes is not an issue of morality, it is an issue of adherence to high-quality tax legislation  The tax advisers’ task is to help clients to comply with the laws  The role of countries is to create high-quality tax laws and to take part in a rational arrangement of taxation in the world  To send the best tax advisers to workgroups of The Global Tax Advisers Co-operation Forum

Thank you for your attention!