The International Centre for Tax and Development has released a working paper on how to best support developing countries in the area of taxation.
The paper says that developing countries would particularly benefit from support in the implementation of two areas that were covered by the OECD’s base erosion and profit shifting project: limitations on corporate interest deductions and the introduction of transfer pricing safe harbours.
However, it says that it would be misguided to encourage developing nation tax authorities to implement all of the OECD’s recommendations in the area of BEPS without considering whether this is appropriate, particularly in light of any political or technical constraints.
Instead, the paper, Assisting Developing Countries in Taxation after the OECD’s BEPS Reports, recommends that developing countries might instead benefit more from technical assistance that would build upon the recommendations from the OECD that are particularly relevant for their circumstances or needs, providing examples.
Article compliments IFC Review.