Earlier this year, the Dutch Socialist Party (SP) raised a number of parliamentary questions regarding the participation of the Dutch tax authorities and other civil servants at the annual congres of the International Fiscal Association (IFA). These questions were answered on 15 September 2017.
As these questions are relevant for the international Tax Justice community, I have provided an unofficial translation (below). Please note that the IFA questions have not lead to any significant public discussion, let alone uproar. I know that a number of researchers have recently been looking at the interplay between tax authorities and the business lobby, and in particular also the IFA. The answers provided in this present case shed only a limited amount of light on this issue (if even that), but speaking as a Dutch ‘insider’, I can confirm that what is being said here makes sense. Also, I don’t get the sense that the Ministry of Finance is ‘holding back’ information (which may come as a disappointment for tax conspiracy theorists).
The Ministry of Finance rightly identifies all the different contacts which are made via IFA and the importance of being aware of the ‘hot topics’ in international tax. After one of my previous articles about IFA, some people have challenged the quality of the academic work which is being done within the framework of the association. All I can say is that it would be fascinating to see the analysis in support of this bold claim. See also the IFA website which lists, amongst other things, the studies produced since 1939 (!).
Whilst obviously legitimate (MPs can ask whatever they want), it is clear that the SP has a political agenda, which you may or may not agree with. The underlying sentiment seems to be that there is something wrong with civil servants going to a glitzy shindig involving lots of tax advisors. I can see the problem here – do we really want out tax officials sharing plates of canapes with representatives of the companies that they are meant to keep in check? – but I am perhaps less fearful for the integrity of the civil service. Maybe I’m naive. On the other hand, even if IFA were a cesspit of tax-related debauchery hosted by the fiscal Illuminati, governments need to keep a finger on the pulse of the international stage. Forewarned is, as they say, forearmed.
*** UNOFFICIAL TRANSLATION ***
The Dutch text is leading.
1) Since when have civil servants of the Ministry of Finance and the Dutch tax authorities been going to IFA congres?
Civil servants of the Ministry of Finance and the Dutch tax authorities have participated at the congreses of the IFA since a long time. It is not possible to establish the exact starting date.
2) How many civil servants of the Dutch tax authorities, the Dutch ruling team and the Ministry of Finance were at the IFA congres in Rio de Janeiro?
For the congres in Rio de Janeiro, the delegation of the Ministry of Finance and the Dutch tax authorities consisted of four people. As is always the case, they were chosen on the basis of their involvement with the topics of the congres. Two of these people were co-authors of the country report for the Netherlands for the two main topics of the congres: «Assessing BEPS: Origins, Standards and Responses» and «The future of Transfer Pricing». Three of them are Dutch delegates to the OECD working groups which wrote the BEPS reports. Two of them were closely involved with the drafting and finalization of ATAD 1, during the Dutch EU presidency. Lastly, two of them traveled directly from the congres to Brasilia for discussions on the bilateral tax treaty with their Brazilian colleagues of the Ministry of Finance.
3) Do the Ministry of Finance and the Dutch tax authorities pay for those attending the congres? What is the budget for this trip?
Yes. The registration fee for the congres was R$ 4.640 (€ 1.248) per person. Other costs (e.g. travel costs) were incurred in line with the relevant guidelines for this type of trips.
4) What exactly is on the agenda at the congreses and how do the participants subsequently report their findings? Can Parliament be informed about this?
The complete program can be found here. In addition to the two main topics (mentioned above), there were seminars on the following topics:
- Fragmentation of contracts and taxation
- Automatic Exchange of Information: a new standard?
- Cost-sharing and Cost Contribution Arrangements
- Advanced Pricing Agreements and International Tax Impacts
- Economic crisis and protection of taxpayers» rights – tax morality?
- International indirect taxation of enterprise services: multilateral, internal or bilateral approach
- Recent Developments in international taxation
- International Tax Impacts of Foreign Exchange Effects
The participants do not submit a formal report of the congres, but the knowledge and experiences gains are of course shared in subsequent discussions and notes.
5) Can you provide a list of the participation in previous years, specifying the number of participants, the program followed and the reports subsequently written by the participants?
Below is an overview of the last five years. It is clear that the number of participants in recent years has been limited. For each year, the number of participants is included, and also the two main topics and the location of the entire program (which includes – in addition to the two main topics – all of the technical seminars and the social program).
Subject 1: Dispute resolution procedures in international tax matters
Subject 2: The notion of tax and the elimination of international double taxation or double non-taxation.
Subject 1: Tax incentives on Research and Development
Subject 2: The practical protection of taxpayers» fundamental rights
Subject 1: Cross-border outsourcing – issues, strategies and solutions
Subject 2: Qualification of taxable entities and treaty protection
Subject 1: The taxation of foreign passive income for groups of companies
Subject 2: Exchange of information and cross-border cooperation between tax authorities
Subject 1: Enterprise services
Subject 2: The debt-equity conundrum
In the coming years, congreses are planned in Seoul, Londen, Cancun, Berlin and Cape Town (2022).
6) Which contacts have the participants made with people from the ‘tax world’ during these congreses? What has been agreed in this respect?
The IFA is not a lobby club, but an association which brings together tax advisors, tax directors, academics, civil servants and tax judges from all over the world. It is the only non-governmental and non-sectional internationals organization which is involved with tax matters. The objectives of IFA are to study and promote international and comparative research in the areas of public finance, tax law and the financial and economic aspects of taxation.
For this reason, participation to the congreses is valuable. Tax topics are discussed from different perspectives and the knowledge of this strengthens the insights of the (employees of the) Ministry of Finance and the Dutch tax authorities, and with this also the quality of their work. During the annual congres, participants have access to many different contacts with tax professionals from all over the world and from many different sectors, both in the formal context of the academic parts of the congres and also during the informal parts of the congres. One of the fixed features of the congres is a «Government Luncheon», where civil servants from different countries share experiences. If invited, employees of the Ministry of Finance or the Dutch tax authorities also partake in the panels.
Note that this type of contact is not limited to the annual congreses. The Netherlands has its own IFA branch. Both the Ministry of Finance and the Dutch tax authorities are affiliated to this branch. Individual employees can also become members and participate in Dutch IFA events. For purpose of the annual congreses, two country reports are produced, as a rule by two authors: one from the private sector and one from the civil service.