International Tax Theory and Policy Assignment | Top Universities

Module name: International tax theory and policy

Increasingly globalized world has made it is easier for taxpayers to manage investments through financial institutions outside of their country of residence. Huge amounts of money are kept offshore and in most instances, untaxed; resulting in taxpayer’s failure to comply with tax obligations in their home jurisdiction. Offshore tax evasion is and remains a serious problem for countries and jurisdictions all over the world.

The Organisation for Economic Co-operation and Development (OECD) and non-OECD, developing and developed countries have a shared interest in maintaining the integrity of their tax systems. Co-operation between tax administrations is critical in the fight against tax evasion and in protecting the integrity of the tax systems. The OECD has a long history of working on all forms of exchange of information on request, spontaneous and automatic- and the multilateral Convention on Mutual Administrative Assistance in Tax matters and article 26 of the Model Tax convention provide a basis for all forms of information exchange.

On 19 April 2013 the G20 Finance Ministers, together with the respective Governors of the Central Bank endorsed automatic exchange as the expected new standard. The G20 decision followed an earlier announcement by the Five European Countries of their intention to develop and pilot multilateral tax information exchange based on the Intergovernmental Agreement to Improve International Tax compliance model and to implement Foreign Account Tax Compliance Act (FATCA).

(OECD 2014)

Required:

Based on the above scenario, critically examine the tax reforms and policies that your country of origin should undertake in order to achieve the above objective. For the purposes of this assignment, you should concentrate on personal and business tax reform. You are also required to discuss in detail the benefits and practical difficulties that your country of origin might face or encounter in order to carry out these tax reforms