Tax Base Protection

The Financing for Sustainable Development Office (FSDO) is carrying out a project focused on strengthening the capacity of developing countries to increase their potential for domestic revenue mobilization through enhancing their ability to effectively protect and broaden their tax base. The work of the project covers a number of topics of particular interest and relevance to developing countries, at their stage of capacity development, with a view to supporting them in:

  • Engaging and effectively participating in relevant decision-making processes;
  • Assessing relevance and workability of options to protect and broaden their tax base; and
  • Successfully implementing the most suitable options, thus fully benefiting from them.

The project draws upon and contributes to the work of the United Nations Committee of Experts on International Cooperation in Tax Matters (the Committee) and its relevant Subcommittees, including the Subcommittee on Base Erosion and Profit Shifting (BEPS), as well as the work of the Organisation for Economic Co-operation and Development (OECD) project on BEPS, as appropriate, with a view to complementing that work from a capacity development angle.

The final outcome of the project will be a UN handbook, comprising a collection of papers developed in a novel demand-driven manner taking into account inputs from developing countries. As the first step, 10 draft papers were developed on topics selected in consultation with members of the Committee, representatives of developing countries and other experts. These papers systematize and summarize relevant information and materials, including those developed by the Committee and its relevant Subcommittees, as well as within the OECD project on BEPS. They aim at simplifying those materials, with a view to providing information geared towards the needs of developing countries, including through the provision of practical examples tailored to the realities of these countries.

To this end, special efforts have been made, throughout the project, to seek inputs and feedback from developing countries, members of the Committee, as well as relevant international and regional organizations. Two designated workshops were held (New York in June 2014; and Paris in September 2014) with the participation of these stakeholders, with a view to reviewing and discussing the draft papers. Both workshops featured intense, interactive discussions of major concerns for developing countries with a view to ensuring that these are taken into account by the papers.

The Paris workshop was held back-to-back with the OECD meeting with non-OECD Economies and International Organizations and the OECD Global Forum on Tax Treaties, during which the authors of the papers reported on the discussions at the workshop and other relevant UN work in the areas related to protecting tax base of developing countries. These served the purpose of providing the perspective of developing countries and inputting into the OECD project on BEPS.

The United Nations Handbook on Selected Issues in Protecting the Tax Base of Developing Countries (the Handbook) aims to identify the most suitable options available to developing countries to protect the tax base, in light of their needs, levels of capacity development and resource constraints. It has been developed through a collaborative engagement with government representatives from developing countries, members of the UN Tax Committee, international tax experts and relevant international and regional organizations. An updated and expanded edition of the Handbook, taking into account new emerging issues and the latest international developments regarding base erosion and profit shifting and the protection and broadening of the tax base of developing countries, will be launched in late 2017.

A first set of United Nations Practical Portfolios on Protecting the Tax Base of Developing Countries (Practical Portfolios) have been developed in order to complement and operationalize the guidelines contained in the United Nations Handbook on Selected Issues in Protecting the Tax Base of Developing Countries through more in-depth and hands-on practical guidance, as well as to make it accessible to a broader audience of relevant stakeholders in developing countries.