G20 china_web

ADVOCACY
Mariano Giralt, Global
Head of Tax Services,
BNY Mellon
Lorraine White, Head
of Global Securities Tax
Research, Global Tax
Services, BNY Mellon
The CRS is now real – Automatic Exchange of
Financial Account Information has begun with more
than 80 countries agreeing to exchange information
by September 2017.
Is Anything Missing?
While the focus of the global tax system has
historically been on the elimination of double
taxation, the focus of the BEPS work has shifted to
preventing instances of double non-taxation and
source country taxation.
One of the main purposes of tax treaties is
to reduce tax barriers to cross-border trade and
investment. As such it will be critical that any of the
work carried out in BEPS does not hamper cross
border portfolio investment. Furthermore, it will be
crucial that investments made by Pension Funds
and Collective Investment Vehicles, that have a
legitimate tax treaty entitlement are not obstructed
as tax authorities redesign their review and approval
systems to deal with the fast paced changes.
The OECD understands this and is well advanced
in this area with its Tax Relief and Compliance
Enhancement (TRACE) project. The TRACE project
was approved by the OECD's WP10 in 2009, but has
yet to be implemented by governments.
With financial institutions playing a key role as
tax intermediaries globally, governments would have
much to gain by revisiting the TRACE project and
encouraging its wide adoption.
BNY Mellon supports these core tax compliance
objectives and believes cross-border information
gathering and exchange of information is an essential
BNY Mellon
One Canada Square
London, E14 5AL
www.bnymellon.com
@BNYMellon
aspect of global financial markets. As a leading
provider of financial services with operations located
in multiple jurisdictions worldwide, we strongly
encourage the development of a common framework
for reporting and due diligence to minimise
inconsistencies. Otherwise, financial institutions
will continue to be challenged with the complex
task of interpreting different legislation and local
country guidance. This will result in contrasting rules
and practices which will vary in interpretations;
exacerbating the already high cost of implementation
and ongoing compliance.
Are We There Yet?
As with most projects, measuring success is vital
and the OECD has outlined its plans here. But,
we can perhaps expect more change and further
structural reform as evidence gathering continues.
Specifically around unique challenges in the EU
where member states enjoy Treaty freedoms and
certain EU Tax Directives. We may also see more in
the area of information gathering and reporting as
we are already experiencing with some tax systems.
Moreover, if governments cannot agree to single
standards and general tax policy direction, we may
expect country by country modifications or even a
move away from in-country tax systems to one that
is more centralised.
The G20 has provided an important springboard
for action and further collaboration. Coordination is
critical and we welcome the opportunity to cooperate
with governments to help develop and implement a
truly global standardised tax regime.
The views expressed herein are those of the authors only and may not reflect the views of BNY Mellon. This does not
constitute investment advice, or any other business, tax or legal advice, and should not be relied upon as such.