We will develop a combination of policy and administrative tools for use by resource-rich developing country governments for each of our 10 issues.
The precise nature of these products will vary from issue to issue depending on need, as well as work being done by other international and non-governmental organizations.
There are three overarching principles that guide the program:
- Adapt existing guidance on international tax issues to be mining-sector specific. We are taking tax issues experienced by a range of sectors in the economy (such as double taxation treaties) and developing a framework by which governments of resource-rich countries can analyze the impact of treaty provisions on taxes imposed on the mining sector, as well as possible strategies to protect the mining tax base against specific treaty risks.
- Fill vital gaps in the available resources. We are developing new practical guidance and tools that specify the precise legal, administrative, organizational and technical means required for tax authorities and mining regulatory agencies to address the tax issue. For example, we look at “metals streaming,” a financing arrangement that may reduce the tax base of resource-producing countries, for which there is virtually no guidance.
- Keep administrative capacity front of mind. We are delivering practical tools capable of being implemented by developing country tax authorities. Mining tax law is only as effective as the administrative capacity of the tax authority responsible for enforcing it. Developing country tax authorities face a range of challenges that impede tax administration, including limited resources, technical expertise and access to tax information. All products will be designed to address these specific challenges.
All results from the program will be publicly available via a dedicated website that will offer users a holistic view of how different mining tax issues interact, and the potential policy trade-offs. The site will be an up-to-date centre of expertise on international tax policy design and administration in mining, and a home to the guidance and tools that will be developed over the next two years.
IGF will deliver a menu of training options for member country governments based on the work produced in Phase 1. It will be a mix of annual training events on BEPS issues, as well as country-specific training and direct advisory services.
With support from GIZ, the IGF will develop a diagnostic tool that countries can use to identify the specific BEPS risks they need help with. The IGF will then gather the relevant policy guidance and tools to provide a tailored package of support.
Our training work has already begun
Training on Transfer Pricing Risk Assessment for the Mining Industry
IGF is providing training to help African tax authorities address transfer mispricing in the mining sector. The first workshop was delivered to the Government of Côte d’Ivoire in October 2017 and a second is being prepared for Liberia in February 2018.
This training is be based upon a new toolkit aimed at helping African tax authorities determine whether particular high-risk, related-party transactions should be selected for a transfer pricing audit. Read more about the training in this blog.
IGF Technical Workshop on Tax Base Erosion and Profit Shifting
This daylong workshop, presented in collaboration with the OECD during the IGF’s Annual General Meeting, provided a forum to discuss these challenges:
- Transfer pricing
- Mineral product pricing
- Excessive interest deductions (use of debt)
- Tax incentives
- Investment treaties and stability agreements.