Base Erosion and Profit Shifting
Developing countries’ revenue losses from tax base erosion and profit shifting (BEPS) is USD 200 billion annually, across all sectors. With a long list of Sustainable Development Goals (SDGs) to finance, it is more important than ever that resource-rich developing country governments ensure existing and future mining projects contribute their full share to government budgets.
This is why the IGF has partnered with the Organisation for Economic Co-operation and Development (OECD) Centre for Tax Policy and Administration to deliver the BEPS in Mining Program. Combining their respective mining and tax expertise, the IGF and OECD will equip resource-rich developing country governments with the knowledge, skills and tools to build and administer robust mining tax systems.
- Training and capacity building
- Legal and policy advisory services
- Experienced tax auditors to assist with mining tax audits via the OECD-UNDP Tax Inspectors Without Borders
Why is IGF Working on BEPS?
For many resource-rich developing countries, mineral resources present a significant economic opportunity to increase government revenue. BEPS—combined with weak tax administration in developing countries—threaten this prospect.
In 2016, IGF member country governments identified BEPS as their primary collective concern.
Building on global efforts to combat corporate tax avoidance, the IGF–OECD BEPS in Mining Program aims to provide sector-specific solutions to some of the most pressing base erosion challenges facing resource-rich developing countries.
Some of these challenges include:
- Excessive interest deductions
- Transfer mispricing
- Undervaluation of mineral exports
- Tax incentives
- Tax stabilization
- International tax treaties
- Indirect transfer of mining assets
- Metals streaming
- Abusive hedging arrangements; and
- Inadequate ring-fencing.
Read our presentation on Resource Taxation in a Changing World, presented at the IGF’s 15th Annual General Meeting (AGM).
Alexandra Readhead is Technical Advisor, Tax and Extractive Industries. She is a specialist in international taxation and the extractive industries.
Howard Mann is an Associate and Senior International Law Advisor to IISD and IGF. He is a specialist in international investment and sustainable development law, as well as mining contract negotiations.
Jaqueline Terrel Taquiri is a Program Officer, Tax and Extractive Industries, with IGF. She is specialist in international taxation law and the extractive industries, as well as global transparency and accountability initiatives related to the extractives industries.
Collaborators include: the African Tax Administration Forum (ATAF), the Inter-American Center of Tax Administrations (CIAT), the International Senior Lawyers Project (ISLP), Organisation for Economic Co-operation and Development (OECD) and the United Nations (UN) Tax Committee.
Please contact us at firstname.lastname@example.org if you or your organization would like to know more about the program, have something to contribute or have suggestions for us.
The program has funding from the UK Department for International Development (DFID), Deutsche Gesellschaft für Internationale Zusammenarbeit GmbH (GIZ), the Canadian government, and the Australian government.
More funds are still required.