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good morning good afternoon good evening to you all welcome to this webcast tax talks where we have a few topics and some news we would like to drive you through so be very much welcome we're in Paris it's cold outside but warm here I have a number of colleagues I will introduce in a second you can see here the usual address if you want to tweet if you want to send those questions we will have 15 minutes at the end of this one-hour webcast to take the questions introduction we start with the introduction of my colleagues I think you know dr. pause he hasn't missed many of these webcast and he's with me to share what he's doing on harmful tax practices and a few of the best implementation things so fuscia tell I think it's her second to third maybe webcast will also share news on the implementation of the multilateral instrument Sam Hogg nappin already participated to the webcast and she will update you on mutual agreement procedures and we have two new participants it's their first participation to the webcast and more and Tibor Hannah P are both from the tax policy and statistics division very good economists working on corporate income tax statistics among others and they will brief you on this publication that we released a few weeks ago I think it's important in the context of all the discussion on Babs the impacts and the consequences that they can share some data because we're now reaching the point where we're able to use data which could help inform the debate topics of the day unsurprisingly given the release which happened earlier today 11:00 a.m. French time that was four hours ago tax and digitalization we have issued a two pager which is almost or about two page long for once and this policy was adopted by the inclusive framework for BAPS implementation we had 95 delegations last week countries represented few were missing as the total membership is 127 members but the paper was endorsed by the full membership of the inclusive framework I think that's quite a milestone and it may be worth driving you through it and you may have a number of questions you may have already seen in different countries some papers written about that so we'll try to give you some insight on this paper then we'll move to the BAPS implementation because when we are working on tax and digitalization we are also working on the implementation of maths there are many links between both and pretty good progress made on Webb's implementation where you will be briefed and finally we spend ten minutes on corporate tax statistics to see what the main findings are and we'll end up with a 15 minutes session on q1 days tax and digitalization you know that we make a case not to talk about tax and digital or digital tax because we strongly believe as demonstrated in the conclusions of the action one report produced in November 15 that it's not a digital is not per se a sector which could be easy to identify but we should talk about the digitalization of the economy a few dates to have in mind when we talk about that the the first one is the delivery of the BAPS action one report which was about the tax challenges of the digitalization of the economy this report was delivered in October November 2015 presented to the leaders of the g20 you may remember the four main conclusions one was it's not digital but digitalization 2 was babs's exacerbated so we will have to take stock by the end of 2020 on the impact the best measures on this challenge of the digitalization of economy the third conclusion was about VA t VA T was not connected on digital services who introduced new regulations new rules to ensure that it that there would be VAT collected in the destination country we now have more than 100 countries which have implemented money is being collected by governments three billion in Europe maybe more in other countries and that's something which was important and fourth and probably the most important or the most conflictual the fact that on corporate income tax there was no agreement on the way forward some country said we need to change the rules to be able to tax profits even though there would be no physical activities deployed on the territory and there were different options examined while other countries said no so we left it without any clear conclusion except that countries would do what they want and we would take stock where we would be by the end of 2020 so that was the action one report and it's clear that the absence of clear conclusion which was not success not to say it was a failure has planted the seeds of the interim measures shorter measures idea in the mind of many countries while we have tried at the OECD to push for progress towards a long-term solution we were helped in that attempt by the fact that German Finance Minister chair of the g20 at that time for gang table in February 2017 mandated the OECD to do an interim report which we produced in March 2018 and will go back to the conclusions of that report since March 2018 we've had a couple of meetings of the taskforce on the digital economy which is the subsidiary body of the inclusive framework for baps implementation the task force has 127 members on an equal footing so the task force met in July and then in December and and these meetings were extremely fruitful with a number of ideas being brought to the table by member-countries and then further explored and what you have today which is released today in January 2019 is a policy note agreed by the whole inclusive framework which draws on these different proposals which have been made and tries to establish if not yet to work plan at least the sense of direction of where we're moving next if we go back quickly to the March 2018 report the focus at that time was on the features of the digitalization of the economy and there were three main features identified scale without mass and I don't need to detail you understand what this means higher reliance on my P with many countries saying nothing really new there and the role of users in value creation user participation user contribution in a number of business models which was acknowledged as pretty new and quite fundamental for a number of countries three groups of countries emerged from that discussion the first group of countries said well there is nothing absolutely new in this area we should wait till the end of 2020 you see the impact of beb's and then advise whether something is needed or not but probably nothing is really needed a second group of countries was more interested into the user contribution there is something new there and we should draw consequences from from this new concept of user contribution you have companies sucking the data of users in exchange for a free service contributing to social network or having access to a search engine and these companies are monetizing the data the user contribution in the third country and this should create rights to tax in the country where the users are and and therefore we should adapt the international tax system to this new reality the third idea which was floated in July last year came from number of countries one big country the United States of America saying actually what starts what is at stake there is much bigger than highly digitalized business models it's a more fundamental issue of the way taxing rights are allocated across sectors because we do not recognize this country speaking that there would be a digital sector or something which could be ring-fenced in spite of this disagreement on what to do there was agreement on let's work together and let's explore this further as was reflected in the communique of the g20 which was issued in March 2018 and the presidency of Argentina since March a lot of progress has been made and progress has come from the free flow discussion among the members of the inclusive framework so you can see again the meetings which were held in July and in December 2018 and throughout these meetings a number of ideas emerged coming from the countries and we have tried to put these ideas onto into two main areas two main pillars pillar one is about the issue of Nexus when do you start taxing a company in this new digitalized world where you may do business in the jurisdiction without having any physical presence which would be characterized as a permanent establishment but also profit allocations so that's the first pillar and we have three proposals which fit and this pillar the second pillar is an idea which has been brought by Germany and France in particular saying that we need to complete the best work some of the challenges coming from the digitalization of the economy cannot be distinguished from the remaining best challenges and as a result we should complete the work finish the job by introducing a minimum tax which by the already features in the US tax reform you know it is guilty so we should work on this idea for proposals were made and under the stupidest so we'll try to drive you through these different proposals because they have been encapsulated in the policy note and they will be the basis for us to establish a program of work that the inclusive framework will look at in May and then which will be reported to the g20 we will go back to the next steps in a few minutes so if we go through the first proposal and the pillar one the user contribution here the idea is to revise the existing rules on Nexus and on profit allocation by reference to active user contribution I've explained the idea and the idea is to be able to attract taxing rights on the territory where the active user base is located this would apply to highly digitalize business models mainly the business models which are based on advertisement in a third country or the platform on the gig economy because these platforms highly rely on the data which is provided by the users this would recognize the value created by the users of the digital services the second approach has some commonalities with the first one in terms of well we need at some point to split the profit of companies but here the approach which is called a marketing intangible approach is much broader it's about saying it's not the users which really create the value it's actually the fact that in a company when you do business you create value or you make profits through engineering your product marketing your project products selling your product and in that approach there should be a Nishan for the marketing intangible which belongs to the market and as a result when implementing both the nexus and the transfer pricing rules there should be recognition of the value created by the marketing intangible there should be a taxing right belonging to the market jurisdiction and this is a very large broad proposal which would address all the digital companies if you want but much beyond the digital companies the more traditional companies a third proposal was made some years ago and quite recently at the same time some years ago because it's grounded in the action one report of 2015 the idea of significant economic presence there should be a nexus where there is a certain degree of sales in a jurisdiction where there is some elements of connection that should be recognized through a new Nexus which should result as well into a new allocation of taxing right more recently and you can recognize an idea which has been supported by India but has now been joined by a number of other countries developing countries in particular but also Colombia which is joining the OECD currently the idea here is to say well yes we need to recognize more right to tax to the market jurisdiction which will address the tax challenges of the digitalization of the economy but this should be done in a manner which is not too sophisticated because if it is too sophisticated a significant number of the members of the inclusive framework will just not be in a position to implement because they won't have the capacity to understand or to implement the pretty sophisticated rules related to a marketing intangible approach and as a result we would have something simpler to implement and simpler to administer if we move to the fourth proposal which is about pillar 2 it's kind of a guilty or an approach which would say we need to address the ongoing challenges related to profit shifting which arise due to the fact that you can still locate profit in a low tax jurisdictions so the idea here would be to provide both the residents country and the source country a right to tax back profits subject to a low or very low level of Taxation even though this would need to be decided and to be clarified what's the level of tax would trigger the implementation of these rules these rules being both an income inclusion rule like guilty where you top up the difference between the effective tax rate and the average rate or full inclusion but you would also have for inbound investment attacks on base eroding payments which would deduct which would reject the deductibility of payments when these payments go to a very low tax jurisdiction with some coordination rule to mitigate the risk of double taxation so many parameters still to be refined to be identified but that's the philosophy of this proposal so four proposals were made regrouped under two pillars and the inclusive framework that it's meeting last week decided to explore them and decided what to do with them and that's what you can see in the policy note which was released earlier today what we can take out of this policy note is one that there is agreement to examine the proposals involving the two pillars there is no agreement on any of the proposals and there is no agreement that there would be a need of the two pillars coming together but still there is agreement without prejudice to explore all the proposals because they are the ones which may support a consensus based solution you can see of course that this discussion is pretty fundamental and that countries are nervous they cannot agree upfront on a solution that they don't master the full consequences of that's why they say let's explore that let's try to reduce the gaps between the different measures that's right to breach them as much as we can let's try to better understand them but yes that's the sense of direction which will drive us to a consensus-based solution that all our governments are calling for the second main feature which is related to pillar one is on the new rules of allocating profits you can see that there is convergence in the fact that there is more allocation of taxing rights to the market jurisdiction or to the jurisdiction where you have the users so you have a change of balance but there is also something that the OECD never touched before because the member countries did not want to touch it and now there is consensus on yes the working hypothesis on these three proposals and the pillar one is to go beyond the amsuman principle not they are not that the answer in principle is trapped I think there is recognition that it's extremely useful for most of the transactions but on the residual profit on the big chunk of profit what should be the rule the three proposals explore or will explore new methods which may go beyond the arms-length principle of course there is also the recognition as a matter of principle that this should not result in taxation where there is no economic profit nor should the results in double taxation and there is nervousness rightfully nervousness that this should not result in a system where companies would be taxed twice on their profit there is consensus on this there is not a single country saying oh this is my proposal and we don't mind about whether there is double taxation or not and the number of countries insists on tax certainty I could quote China for instance which i think is very interesting to say we need to be very clear for that we design the solution which will eliminate the ball taxation and which will provide tax certainty so consensus on this point as well with also improvement of the dispute resolution mechanisms the conclusions are about the mandate to the OECD to elaborate a detailed program of work that the inclusive framework will be invited to agree at its meeting in May the next meeting of the inclusive framework plenary session will be the last week of May just on time to provide a report to the g20 finance ministers who will be meeting on I think it's on the 8th and 9th of June in Fukuoka so the idea is to refine the approaches try to bridge whatever can be bridged to be able to explore what would be needed to further elaborate these different proposals so that countries type can take the hard decision this works this doesn't work this could lead us to consensus so that in the following 18 months between now and the end of 2020 we could refine the approach and facilitate the emergence of consensus on each of the two pillars of the two pillars combined but I think the political imperative which has been fixed to the OECD by the g20 and much beyond the g20 by the OECD membership the inclusive framework membership is to find a solution and we now have all the elements all the proposals which should allow us to find a proposal so if we look at the next steps in the coming months you will see that we will be quite busy and we will start with a public consultation this issue is an issue of concern for everybody business civil society governments so we will start with the release of a public consultation document by the 11-12 of February which will give three weeks for all the stakeholders to command and to send us written comments at the Yui City and then we will hold a public consultation I think it's on the between the twelve and the 14th of March it's that week of March in Paris we will hold a public consultation meeting where we will draw on the comments received and where we will have a conversation between the members of the task force on the digital economy and all those who would have commented based on the public consultation based on the work that the Secretariat will be doing under the supervision of the steering group of the inclusive framework which includes 24 countries we will feed the inclusive framework with a program of work a detailed program of work between May and the end of 2020 and the idea here is not to explore just the solutions but develop them so that at the end of 2020 that would be hopefully one solution agreed by consensus which would have all the elements ready to use for governments to change the rules so that they can address the tax challenges of the digitalization of the economy and possibly beyond depending on the solution which will have been agreed by then in June as I told you the g20 will be informed by the secretary-general of the deliberations of the inclusive framework in its May meeting so that's where we are today pretty important milestone I think which is released and for the tax geeks I suppose there are a number of tax geeks watching us today you can see that the language in the policy notes is quite new and quite fundamental of course no agreement yet on the substance but agreement to working to get to work together commitment to working together so that we can reduce the differences and come up with a unified long term solution by the end of 2020 that's going to be difficult but it is feasible and I think we have demonstrated throughout the management of the best project that we could deliver big things in a short period of time it's bigger it's shorter in terms of timing but it's still feasible and definitely very exciting but why doing that we are also making sure that the best measures be implemented because that's where you have some fundamental changes happening in the behavior of businesses the behavior of tax administration and taking stock of the progress made on the best implementation I think is extremely important and that's where I turn to Hakeem for him to brief you from the update on the EPS implementation Thank you Thank You Pascal yes over to big things as Pascal says things where we have actually delivered that makes you optimistic about our ability to deliver also in digital I think they always say about past performance is no guarantee but at least we do have some precedent here I think that we can look at so I will at first take you if the clicker works it does to harmful tax practices and where we are and this takes you from the future the not so distant future but still to the future to the present it's extremely present because we have released the 2018 progress report today on where we are on harmful tax practices we did this very quickly it includes results of decisions we only took in the second week of January and then it was approved when the inclusive framework matter discussed of course primarily the question of digital but also went into the F HTP and where we are as a brief recap what is harmful tax practices harmful tax practices is trying to create an environment in which there is tax competition there's no problem with tax competition but there is sustainable tax competition which means it is not based on a lack of exchange it is not based on a lack of transparency it is not based on regimes that only affect the neighbor but not yourself and it is also not based on things that have no substance so that's the essence and as you can see here on the second bullet point we have now reviewed a total of 255 regime around the world 70 jurisdiction to make sure that we have a level playing field and what a small country does a big country has to do and where the country in Africa does the on tree in Europe do as well so we do have a global level playing field so we don't move it from one country to another but we address the issue that's the aggregated view 255 regimes from 70 jurisdictions since the start of the BEPS project the new results the ones that we took in December is as it says here 80 decisions on 57 regimes from 19 jurisdiction if you wonder how you can take 80 decisions on 57 regimes good question that's simply because some of these regimes are IP visions and non IP regimes so technically that's two decisions so where does this take us and this is the overview can find us on the report you can also find it on our website so where are we first of all I think and I would say that you might say it is a statement of the willingness and the ability that wants the countries that are now a large group of countries India includes the framework more than hundred and twenty-five have taken a commitment they implemented commitment they take it extremely seriously and as a result of this you see the results that speak for themselves so if you look across all of those jurisdictions where we are as of today there is only two regimes that are actually harmful and with respect to those two that only relates to a grandfathering provision so even those two going forward are clean but there are some issues that some people are still in the regime's in a way that shouldn't have been but that is an issue that with time will simply go away we also have a small group of potentially harmful regimes and again you find the lists you find the names you find all of the information in the report and website which country which regimes how many and why but even here under potentially harmful we see movement it largely relates to grandfather in questions where countries are working to clean this up even the small number and the same is then true for potentially harmful but not actually harmful regimes which means technically it's a regime that violates the rule but the economic effect is relatively insignificant so there isn't really a risk for the international community that does mean that if we step back that every one of the IPV genes that we had when we started to project has been changed is now consistent with what we have agreed if you look at the total number of legislative changes if you just look at the process of being elementadd not harmful amended abolished amended out of scope it's more than a hundred and twenty five pieces of legislation that needed to be changed to be clear to get to these results wasn't just something that we looked at and say it's not a problem it's that the country's changed their rules their laws and made them consistent with what they had agreed to do so that I think is is where we are in a quick overview and then maybe just taking you the last slide on F HTP where next one we are going to start to review the null or nominal tax jurisdiction just very briefly what is this it basically is the extension of the substance requirement from regimes to countries that don't have a corporate income tax and the logic here again is the level playing field that says if you need to have substance where you are a normal country with a low rate regime then it cannot be that you can just move that same thing to a jurisdiction that doesn't have a tax and then you don't need substance so basically in a snapshot wherever you go substance will follow you wherever you are it's something that you need to meet then second we will also do the review of the ongoing regimes as we always have countries introduce regimes new countries come in existing countries introduce regimes there's a lot of work we still have 15 regimes that are in the process of being eliminated but we will check whether countries also honor their commitments subject to the time learns that have agreed and there's another 28 regimes under review in the process there's ongoing monitoring where we say does it get bigger as I said you know some not actually harmful potentially does it grow the monitor we get economic indicators we see whether we need to worry about it and then of course there's an important aspect of transparency the ruling exchange where thousands of rulings have been exchanged and that is being reviewed every year and the third one is coming up the next year so you can see that on fht p a busy schedule ahead thank you thank you very much' kim impressive numbers indeed let me now turn to Action 6 peer review in action 6 another very important milestone happen and you'll see published on our website in February the first peer review report on action sex the objective is to report on the compliance with action six minimum standard the progress of countries in implementing their commitment to that minimum standard just a reminder the action six minimum standard has two main component the first one is a statement that truly cannot be used really it's not their object to be used to to avoid taxation so that's the preamble that has been changed or will be changed in a lot of tax treaty to include that statement the second element is the inclusion in tax treaties of an inch III D shopping rule well it could take the form of a from a principle purpose test which is a general anti-abuse or something more detail which is called the limitation on benefits so in a nutshell this is the action six minimum standard that country's jurisdiction has agreed to include in their tax treaties the content of the report has two main in very important part the first one is a look at the aggregate result of the nearly 2000 tax treaties that have been reviewed in the context of action six peer review and what we find there is very important and it's des 65% of the treaties will or will be changed by an agreement in a signing of DM Li and that is important because it shows that the best are the preferred way for jurisdiction to amend their tax treaties is through the MLA those that have choose the bilateral renegotiation of their treaties are later in showing any progress so again a big success of the MLA in implementing what jurisdiction has considered a minimum standard and important to do the second part of the report shows each jurisdictions progress towards the implementation of the minimum standard and it includes a hundred and sixteen jurisdiction that were covered with that 2018 peer review now talking about the MLA where are we now well after the signature of Papua New Guinea in January we now have 87 jurisdiction covered by DML I what it means is a thousand five hundred matched agreement we still have a thousand that are looking for a match which hopefully will come soon as countries are signing the MLA what we see in those match agreement is that all of them will include a principal purposes test which is a very good and significant development but not the least there's also an update of the action 14 minimum standard in respect to treaties and centra will go through that minimum standard but very good outcome of DML I in addition to several countries that have opted for arbitration where are we in terms of ratification well as of today with Ireland having deposit its instrument of ratification we are now 19 jurisdiction that have ratified the MLI which will enter into effect in their to time but already 47 agreement for which the ml I have enter into effect on January 1st 2019 we are waiting for additional ratification and we expect them to come in the coming months so this was the update on Action 6 peer review and the MLA and I will turn back to acumen yes thank you Sophie will give you more numbers we'll move to a different minimum standard we move to action 13 country-by-country reporting from tax administration to tax administration as well globally agreed as part of BEPS action 13 so just to give you a little bit of a sense where we are what we do what's happening and what's gonna happen next and that's on the last slide so snapshots on where we are today you see it on the slide around 80 jurisdictions currently have their cbcr law in place what we see is generally the law is in line but the minimum standard and you will have seen through various announcement and updates that we do on our website that where we identified at an issue we try to work to address these inconsistencies quite quickly or so we work with the countries with draft legislation we try to get them to change where we indicate and where we see that there's a problem thank you also to business who alerts us where there are issues please continue to tell us where you see problems you see there may be some times earlier than we do very useful approaches approach me approach the team let us know where you see problems of inconsistency and we will try our best as hopefully we've done in the past to address it as much as we can and we have about 7000 CBC reports file for 216 that's in line with our expectations that also means that if you step back by and large all of those companies that were intended to be covered above the 750 that meet the requirements should be in the system globally speaking so that's a big step as we've indicated there's about 2000 bilateral exchange relationships that have been activated including between the 75 signatories to the CBC multilateral competent authority agreement and a number a large number and increasing number of bilateral agreements signed by the United States the exchanges while there were some glitches with respect to some countries the technical transmission based on our agreed common transmission system are now working the working is extended so the exchanges have also taken place so then of course you wonder if your taxpayer and you're covered like what is happening next well tax administration are now in the process of going through it of running their models of combining it with other information that we had trying to make sense of it working with it combining it and they will be using it and you may have heard or you may have seen the consequences of the CBC filing so that's a now thing that is happening what we do collectively at OECD a number of things some of them you know of course we are working on a handbook which forms the basis in many countries of how you proceed as you think through the CBC we also plan updates we did it before there were the exchanges now we're thinking of bringing the tax administration together and doing another hand back and book that now has the benefit of exchanges having actually happened of the filing of CBC reports so that's one work stream we have a number of risk assessment workshops thank you to China s ta that hosted one earlier or earlier last year in fact in China where we also brought together business we brought together tax administration's to think through to work through what it means and how you do the most effective use of the information what it means and importantly also what it doesn't mean and then just to nee adventure in the last two we have a comparative risk assessment initiative which not just limited to but inclusive of the CBC our reporting is thinking through we have the same transfer pricing rules we have similar risks we've resulted in more standardization through the BET's process can we also perhaps better understand and potentially converge have more synergy and standardization in the risk assessment process that we apply to what is increasingly a standardized set of data and and of course and that would go way beyond the time that I have there's the I cap pilot of a multilateral approach to risk assessment and assurance which in significant part builds on the CBC and has grown out of this so more of that in a while now so then the last point I guess on what next in the CBC space as you know there is a 2020 review thank you again for be a call so for having made a contribution on the sorts of issues that we look at again any further suggestion let us know the sorts of things that youth to see are not working that you think we should be thinking through and we will have further discussions the first question here where we are is for us to identify the key issues for consultation based on the experience of tax administration's that they now have based on the experiences of businesses that have completed its stakeholders some of the things you can see on the slide given the time not gonna go through them in any detail there's questions around scope there's questions around content there's issues related to local filing there's some other issues where people are suggesting making the master file a minimum standard further standardization some worry that perhaps certain things that shouldn't be in the CBC find themselves in the master file so there's issues that need to be thought through we plan to have a public consultation on a draft that we produce by late - 19 - 20 and just as a general word we are conscious of the fact that companies have built system based on what we have and so we will need to be reasonable in the changes that we make and take all of those factors into account I think that's the last slide on CBC and it goes to Sandra for an update on that thank you our him so where are we in in Bab section 14 as you can see some good news some less good news everything is going fine I would say the map statistics give some encouraging numbers we also see some improvements in guidance and in additional resources for the map functions which was really necessary if I can highlight two things for you you see that 20% of the cases resolved our results via unilateral belief which is good because it shows that map is working like it should be working that means that the competent authority that receives a map request first looks itself whether it can resolve it and it does so it works in 20% of the cases which is good news but it also shows that 20% of the cases that go to map are perhaps cases that should never have gone to map if there would have not been such a taxation so it's good news for map but there are still things that could go better 80 percent of full resolution for transfer pricing cases is I think really a good news but I should also say that on a positive side 80% is a full resolution that does not mean on a negative sight that 20% has not been resolved because the other 20% there might be very legitimate reasons for denying access or for having an objection or justified so we can't deduct from this that 20% map did not work so I think that for competent authorities what they did is a lot more than only achieving a result in 80% now we also know that there's still a lot of work to do and some of the work if I can highlight some of the points there on the slide some countries will need to take actions to change policy practice legislation to be compliant with the minimum standards we also see a 40% increase of cases started which means that even the countries that are doing good for the moment will need to monitor whether they will have enough resources to be able to follow up with this big increase of cases started so that I will be able to resolve their cases within 24 months and we also identified some issues that will not have been addressed by the actual current minimum standards so we know that some things could still improve in the future now if I can show you some some numbers you see here on the left side the top 10 jurisdictions with a number of map cases and and as you can see only three of them have decreased their inventory in 2017 compared to 2016 so for seven out of the ten they have an increase of their inventory which shows that there is still a lot of work to do to get less cases at the end of the year now on the right side you can see the speediest jurisdictions that had more than 100 cases to resolve in 2017 and then on the other side good is that five out of these jurisdictions that are below 24 months are jurisdictions that are in the top ten on the left so with a lot of cases in inventory and a lot of cases being resolved as you can see the numbers of the jurisdictions so many of them resolved many cases in an acceptable period of time and and with that I will limit myself to telling you a little bit about what we're going to do this year so at this moment we are doing two things while we are doing more but batch five has been approved and will be published very soon next month in the March meeting we will be discussing not only batch six but we also started stage two monitoring and for batch one this has been going on and we'll we we will already be discussing Stage two for batch one in the March meeting so we are started with stage two now together with the completion of stage one for the last batches but seven started very recently and we will continue working on that and then mid-february we will ask input for taxpayers for batches eight and then of course in by the end of May we will get the statistics for 2018 that then will be published a little bit later on in the year and as more and more years go by with the new map statistics reporting framework we will get more and more interesting information from the statistics in the future and will that I will give the word to and thank you and so now I'm gonna say a little different which is our new corporate taxes six database and we recently released it in on January 15th same and um and the database is available online and we also have a company in for sure available in English and French which describes the data and some of the key insights that can be gleaned from it the publication of this new database was a recommendation of the Beth's action 11 final report which noted that a lack of quality information on corporate tax was a limitation in measuring the scale of EPs and impact of the best project so in this new database we bring together a range of data sources relevant to corporate taxation including data on corporate tax revenues rates and incentives and overall in the database we have information on around 100 jurisdictions there are a few key insights that we've drawn from the database one is that corporate tax revenues remain a key source of revenues for governments and this is especially the case in developing countries we also see that statutory corporate income tax rates or CIT rates have been falling over recent decades but that headline statutory rates only tell part of the story which is why it's extremely important to also take into account other aspects of corporate tax systems when looking at on the tax rates firms face and the economic incentives that creates um I'll go through now in a little more detail some of the data that's contained in the database um in this graph we can see corporate tax revenues as a percentage of total tax for the 88 jurisdictions for which we have revenue data in general corporate corporate tax is a significant revenue source for countries there is some variation that can be caused by differences in statutory tax rates in the breadth of the corporate income tax base and in the amount of revenues raised through a non corporate taxation corporate tax is particularly important for developing countries in 2016 corporate tax revenues made up a little over 15 percent of total tax revenues on average in Africa and in Latin America and the Caribbean well it made up about 9 percent of tax revenues on average across the OECD countries excuse me in this next slide we can see information on statutory corporate tax rates for the 94 jurisdictions for which we have tax rate data available and here we can see that statutory tax rates vary considerably across jurisdictions about half the jurisdictions in our sample have rates between 20 and 30 percent but the full range goes from zero to over 40 percent despite the variation that we that we see among jurisdictions when we look at trends of average rates over time we do notice a definite decline so when we take the average of all the jurisdictions in our sample we see a decline of about 8 percentage points from 2000 in 2018 so from 32 percent in 2000 to 24 percent in 2018 and in this case we're excluding any jurisdictions with zero percent tax rates in this graph we can also see statutory cit rates by regions so we look at Africa Asia and Latin America and the Caribbean and we also look at a seedy countries and in all these cases we also see declines in statutory tax rates over the last few decades so so this decline is a sign that's happened in certain countries it's something that we see all over the world and now I'll turn things over to Tibor to take you the rest of the database Thank You Ann so so far we've heard something about CRT revenues and rates but started to rates tell only part of the story because they do not take into account variation and definition of corporate tax bases corporate tax bases vary across jurisdictions due to a whole range of different provisions such as for instance those related to physical depreciation or other allowances and deductions copper taxi districts database therefore also provides some additional information to give them some additional comparable information on these aspects of the corporate tax base what you see in this graph here are forward-looking effective average tax rates and they are compared to statutory tax rates in 2017 so that's before the US tax reform and they include the effects of fiscal depreciation as well as allowances for corporate equity and several other country specific allowances and deductions and you can see we've ranked the countries from the lowest rates on the left to the highest on the right and here it's important to distinguish between fiscal deceleration and acceleration in the case of deceleration the effective average tax rate is higher than a statutory rate and this effect is shown by the light blue shaded bars or parts of the bar on the other hand in cases where there is fiscal as acceleration and the starter rate is above the e ATR and this difference is then shown in the transparent elements of the of the bars and if you look now at the graph you can see that most countries provide some degree of acceleration and this can be quite significant for some of the countries in the sample like for instance the united states were the effective average tax rate was 4.8% egde points but not below the statutory rate in 2017 in India it was 3.8 percentage points below the statutory rate for instance so these effects taking those into account can change the ranking of the countries and give you indications about the competitive position of each of the countries second aspect that we're looking at our expenditure based R&D tax incentives and here we see them in the graph together with direct funding for excuse me business expenditure on R&D and both are given as percentage of GDP for the year 2016 and there are two insights emerging from this graph the first is that overall total government support has increased so this includes the tax incentives as well as their government funding and you can see that by looking at the blue diamonds and comparing them to the stag bars the second insight that comes out of the graph is that there is a significant amount of cut of countries that uses comparatively generous tax support compared to direct funding and this you can see by comparing the light blue and the dark blue parts of the of the bars and this taken as a whole over the entire sample means that tax support for business and expand business expenditures on R&D has increased from thirty six thirty six percent of the total government support to forty six percent over this ten-year period another element that we've already heard about our intellectual property or IP regime and those reduce also the tax burden as we've heard from Hakeem and the Forum on harmful tax practices is reviewing the regime to determine their status and what we've looked here in in the coop attack statistics database is to take a closer look at those regimes that have to have been found to be non harmful as of November 2018 and to look at the tax rate that would otherwise apply outside of the regime and compare these rates to the tax rate that applies under the IP regime and here you can see that the regimes offer a considerable amount of reductions ranging from around 30 percent for instance in the canton of NEET Vardhan in Switzerland up to 100 percent in Hungary San Marino or turkey so these are significant reductions and I'm just - to wrap up on current coverage for the first three elements in the database revenues territory rates and forward-looking effective tax rates recover respectively eighty eight ninety four and seventy four jurisdictions and we working to expand the coverage to as many inclusive framework members as possible for the income based and the expenditure based R&D tax incentives were also working to expand coverage together with colleagues at OSD and we're planning to incorporate those provisions into the forward-looking effective tax rates and the last point that's interesting on this slide are the country by country reporting statistics which I can assure you we're working on at the moment to collect and prepare the data which will then be published as part of the second edition of corporate tax statistic so stay tuned and we disagree it back to Pascal thanks a lot Tibor and we've taken more time than we thought we would and actually all the blame is on me as I took ten more minutes than planned which are the ten minutes missing right now to take more questions but we have four minutes left and we have a few questions and actually the first question is for YouTube or on the country-by-country reporting statistics when will it be publicly available it's not the CBC R which goes public so no big news there just calm down everything's fine for those not liking the idea of publicity of others liking it and fortunately no positive answer yet but we will publish information on the aggregated data so when will this be available Tibor country-by-country reporting statistics will be part of the second edition of corporate tax thoghte istic s-- and as far as I know it will be released at early 2020 early 2020 is the answer but we hope we can hint on what's in there in the in the report which will be presented to g20 finance ministers in June 19 so Tibor yeah some more work to be done to get that happy to share that with you at the same time as with those watching us a question for Hakeem and are we working on something like guilty @c TPA I'm tempted to say yes and leave it at that in the interest of time but the answer is yes we are working on as Pascal has explained the concept of a minimum tax and we're exploring aspects and we will certainly take into consideration and maybe informed by the experience of the US with guilty so yes thank you I came clear-cut answer another question and I will turn to you again which is about should one explore profit split methods for profit attribution and we turn to a Kim but I would like to make an announcement I could have started with that which is that Jeff van Hoff who join us I think earlier at webcast but who has joined the team for a few months has now been appointed as head of the tax treaty and transfer pricing unit unit which is a piece of information I wanted to share the question would be for him but for the time being it's for RM so on this first pillar as we organized as a team to work on all these topics is it about profits bit as Pascal has explained there is a number of approaches that are being explored on without prejudice basis and both the user participation contribution approach and the marketing intangible poach when they come to not the scope which is where they're different but when they come to the mechanics well how would this implement it are exploring forms of a residual profits but importantly on the marketing intangible as the marketing intangible name suggests it would require splitting the residual also between elements such as R&D and marketing and then only the marketing portion of the non-routine part would be allocated to the market jurisdiction on the basis that Pascal has explained I had actually a last question but we have 30 seconds left so Tibor that's the challenge for you what is the difference between forward and backward looking effective tax rates 30 seconds so that's the thousand dollar question I will try to make it as quick as possible and backward-looking rates are based on empirical data so basically that's something that comes out of a tax return or some kind of other data source forward-looking rates only take into account tax policy information apply those to an hypothetical investment to isolate the effects of the tax systems one is based on data which has been collected and is seen why the other is more simulation or modeling outcome Thanks not dollar for you but some time left for us I would like to thank the team I hope you enjoyed we spent more time on the tax challenges of the digitalization of the economy but I guess you know why we think that this is an important piece of news we had to share with you we hope that we provided you with the instruments to understand this policy note and to be able to anticipate what the public consultation document will be like in a couple of weeks from now and then we very much look forward to your contribution to the debate when we hold the public consultation mid-march on that I would like to thank the technical team for assisting us in organizing this webcast the team here round the table and to you all for listening and watching us thank you very much and we'll have another one sometime soon Thanks bye-bye