NEW DELHI, May 13: Paris-based think-tank OECD has mooted the idea of sending experts to developing countries, including India, to help in issues such as transfer pricing besides various bilateral taxation-related matters.
The Organisation for Economic Cooperation and Development (OECD) is a major player in setting global taxation standards.
The concept of ‘Tax Inspectors Without Borders’ would focus on boosting domestic revenues of developing countries by making their tax systems fairer and more effective.
According to the OECD, the initiative would provide international auditing expertise and advice to help developing countries better address tax base erosion, including tax evasion and avoidance.
“Tax Inspector Without Borders aims at providing developing countries with good experts on transfer pricing and tax treaties to assist them on a short term assignment when they audit multinational companies,” a senior official at OECD’s Centre for Tax Policy and Administration told.
The transfer pricing mechanism is often misused by multinational companies to transfer profits to their subsidiaries in low tax countries.
As part of developing the new concept, OECD would set up an independent foundation which is expected to be operational by the end of 2013.
The official noted that OECD is revising the transfer pricing rules on intangible and simplifying the norms in general to make them more implementable and tougher.
“We also are active in promoting work against aggressive tax planning,” the official said.
As per a report from the Global Financial Integrity, transfer of funds through mis-pricing which accounts for 77.6 per cent of total illicit outflows.
Earlier this month, the government announced setting up of an Advisory Group on International Taxation and Transfer Pricing. (PTI)
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