Offshore Tax Evasion

Two newly published OECD reports highlight that many financial centres, both onshore and offshore, are making progress in improving transparency and international co-operation to counter offshore tax evasion, but some still fall short of international standards.

Tax burdens

According to the OECD, the average tax burden in OECD countries is back up to the same levels as in 2000 after a brief reduction between 2001 and 2004, with Ireland seeing its tax burdens rise by more than one percentage point between 2005 and 2006. The tax burden is measured as the ratio of tax to gross domestic product (GDP).

Taxation of SMEs

A Global Conference took place in Buenos Aires to examine the experiences of countries in the taxation of Small and Medium Enterprises (SMEs).

Over 80 countries were represented at the conference. The following are some issues considered:

• SMEs are seen as a driving force for job creation and innovation.
• The impact of tax systems is not simply a matter of looking at tax rates.
• Careful consideration needs to be given to whether special tax policy arrangements are appropriate for SMEs.

OECD Model Treaty

The OECD has published comments that it received on a discussion draft of a revised Commentary on Article 7 and revised draft changes on the Commentary on paragraph 2 of Article 15 of the Model Treaty.

Comments on the revised Commentary on Article 7 (attribution of profits to Permanent Establishments) and the revised draft changes on the Commentary on paragraph 2 of Article 15 (taxation of employment) are available from the OECD website.