Wuzhen Statement

Wuzhen Statement

The First Conference of the Belt and Road Initiative Tax Administration Cooperation Forum

Wuzhen, China  April 18-20, 2019

1.  Heads   and  their  representatives  of  tax   administrations   or   finance departments  from  85  jurisdictions,  16  international  organizations,  and  a number of academic institutions and businesses met in Wuzhen during 18-20 of April, 2019 for the first Conference  of the Belt and Road Initiative Tax Administration     Cooperation     Forum     (hereinafter     referred     to    as “BRITACOF”), organized with the support and under the Presidency of the State Taxation Administration of the People’s Republic of China (hereinafter referred to as “STA”), and attended by more than 350 delegates from the Belt and    Road    Initiative    Tax    Administration    Cooperation    Mechanism (hereinafter referred to as “BRITACʘM”) participating tax administrations (hereinafter referred to  as  “TAs”), the International Monetary Fund,  the Center  for  Tax   Policy  and  Administration   from  the  Organization  for Economic Co-operation and Development, the United Nations, the World Bank Group,  and representatives of other  international organizations. The discussions, enriched by the engagement with  stakeholders, focused on how to build a growth-friendly tax  environment that would promote economic

growth while ensuring tax revenue mobilization in jurisdictions that support the Belt and Road Initiative (hereinafter referred to as the “BRI”). Agreed to by all the BRITACOM Member TAs and the Belt and Road Initiative Tax Administration  Capacity  Enhancement  Group  (hereinafter  referred  to  as “BRITACEG”) Members, this statement is the outcome from the 3 days of discussions  and  is  issued  under  the  responsibility  of  the  Chair  of  the BRITACOF  Conference   for  the  BRITACʘM  Member  TAs  and  the BRITACEG Members.

2. We, the BRITACʘM Member TAs and the BRITACEG Members, met at a time when the world economy is undergoing profound changes, presenting both opportunities and challenges. We welcome the modest global economic growth while  recognizing  that it has been increasingly less  synchronized between countries and some of the major risks have partially materialized.

3. Although the concept of comparative advantage is still as relevant as it was 200 years ago, we are mindful that the world production has been structured into  global  value  chains,  bringing  about  dramatic  changes  to  the  world production landscape and further accelerating the economic globalization process.

4. Wereaffirm our stand on supporting multilateralism and making economic

globalization more  open,  inclusive,  and  balanced  so  that  its  benefits  are shared by all. Economic globalization, liberalization and facilitation of trade and  investment  have  promoted  competition  and  innovation,  which  are beneficial  for  world  peace,  stability  as  well  as  balanced  and  sustainable development.

5. Recognizing that tax cooperation plays an important role in materializing the above-mentioned values and rationale as well as in facilitating the BRI economic  development,  and building  on  the  consensus  embodied in  the Astana Proposal released in the Belt and Road Initiative Tax Cooperation Conference during May 14-16, 2018 we officially launch the BRITACʘM by signing the Memorandum of Understanding on the Establishment of the BRITACOM (hereinafter referred to as “MoU”). The BRITACʘM consists of the Council, the Secretariat, the BRITACOF, the BRITACEG  and  the Advisory Board.

6.  The  BRITACʘM  aims to facilitate tax administration cooperation and promote sharing of experience and best practices in tax administration so that the   BRITACʘM   contributes   towards   building   a   growth-friendly   tax environment.   The    BRITACʘM    supports    and    reinforces   prevailing international  tax  standards  such  as  the  OECD  and  UN  Model  Tax Conventions  on  Income  and  on   Capital,  the   OECD  Transfer  Pricing

Guidelines, the UN Transfer Pricing Manual, the Inclusive Framework on Base Erosion and Profit Shifting and the Global Forum on Transparency and Exchange of Information.

7. To the date this Statement is released, 34 tax administrations or finance departments   have  signed up to be the Member TAs of the BRITACʘM Council,  22  tax  administrations  or  finance  departments  and international organizations have signed up to be the Observers, 19 tax administrations or finance departments have signed up to be the BRITACEG Members, and 14 tax administrations or finance departments, international organizations and academic institutions have  signed up to be  the BRITACEG Partners. In addition, 11 world-recognized tax experts have signed up to be the Members of the Advisory Board. Annex 1 provides a list of the BRITACʘM Council Members and Observers.

8.  The  Council  is  the  decision-making  body  of  the  BRITACʘM.  In  accordance with the MoU, Mr. WANG Jun, Commissioner of the STA, the  People’s Republic of China, was appointed as Chair of the Council. To assist  Mr. WANG Jun in fulfilling the vision and purpose of the BRITACʘM, Mr.  Marat  Sultangaziyev,  Chairman  of the  State  Revenues  Committee  of the  Ministry of Finance, the Republic of Kazakhstan; Ms. Tuma Adama Jabbi,  Chairperson of the National Revenue Authority, the Republic of Sierra Leone; Mr. Khalid Ali Albustani, Director General of the Federal Tax Authority, the  United  Arab  Emirates;  and  Mr.  Joaquin  Serra,  Director  General  of  the  Dirección  General  Impositiva,  the  Oriental  Republic  of  Uruguay,  were  elected as Vice-Chairs of the Council.

9. The Secretariat is a liaison office supporting the daily operation of the BRITACʘM. We  thank  the  People’s  Republic  of China  for  hosting  the Secretariat in its capital city, Beijing. In accordance with the MoU, Mr. LIAO Tizhong, Director-General of the International Taxation Department of the STA, the People’ s Republic of China, and Mr. Yermek Kozhabergenov, Head of the International Relations Division, the State Revenues Committee of the Ministry of Finance, the Republic of Kazakhstan, were appointed as Executive  Secretary  and  Deputy  Executive  Secretary  of  the  Secretariat respectively.

10. The BRITACOF is a non-profit official event authorized by the Council. We thank the STA for hosting the first BRITACOF Conference. The second BRITACOF Conference will be held in Kazakhstan in 2020. Starting from 2021,  the  BRITACOF  Conferences  will  be  hosted  by  Member  TAs  in rotation following the alphabetical order of their home jurisdictions.

11. The BRITACEG is a network composed of willing Member TAs or Observers of the  Council who, making full use of their existing training institutions  or  expertise,  are  dedicated  to  conducting  tax-related  training, research and technical assistance programs approved by the Council. Annex 2 provides the list of the BRITACEG Members and Partners. In accordance with  the  MoU,  Mr.   Anatoliy   Aleksandrov,   Director   of  the   Strategic Development and International Cooperation Department, the State Fiscal Service  of  Ukraine,  was  appointed  as Director of the BRITACEG. The

Council also approved 4 BRI tax academies (hereinafter referred to as the “BRITAs”) to be setup in different regions, open to all the Member TAs and Observers for the above-mentioned purposes. We thank Kazakhstan,  the Macau Special Administrative Region of China and the mainland of China for setting up BRITAs based on their existing tax institutions, and encourage more jurisdictions to setup BRITAs.

12. We recognize that the BRITACʘM isanopen, transparent, inclusive and sustainable    administrative   mechanism    that    is   jointly    built    through consultation to meet the interests of the jurisdictions  supporting the BRI. In light of this, we welcome interested parties to join the BRITACʘM and the BRITACEG  following  this  BRITACOF  Conference  by  completing  the procedures stipulated in the MoU.

13. We call on Member TAs and  BRITACEG  Members  to take concrete actions in the following areas, taking into consideration our national laws and regulations, and reinforcing  and  supporting  international  obligations  and standards, so as to build a growth-friendly tax environment:

Following rule of law in taxation

14. A growth-friendly tax environment must be shored up by robust tax administration. We reiterate the essential role of the  rule of law principle in underpinning the fairness and impartiality of tax administration.

15. To this end, we will respect  the spirit and letter of law in taxation, and expect  that  taxpayers will  make  a  similar  commitment.  We  reaffirm  our commitment to ensuring the tax system is administered fairly,  transparently and with consistency.

16. We  are determined to  apply the laws  and  the  tax  treaties  in  a  fair, predictable and consistent fashion.

17. We recognize that the accessibility and the efficiency of a domestic tax dispute prevention and resolution regime are crucial to build investors’ trust in the  fairness of the taxation  system. We  support  continuing  efforts by BRITACʘM Member TAs in building fair, coherent and efficient domestic tax dispute prevention and resolution mechanisms.

Raising tax certainty

18. Economic growth depends in part  on the growth in cross-border trade and investment, which requires high level of tax certainty.

19. Wereaffirm our commitment to offering support to taxpayers in order to improve tax certainty by enhancing the transparency and predictability of tax laws in order to build mutual trust between taxpayers and tax administrations.

20. We highlight the importance of minimizing tax uncertainty by avoiding discretion  as  well  as  increasing  consistency  and  transparency  of  tax administration.

21. We call on BRITACʘM Member TAs to enhance dialogue with taxpayers by  exploring  cooperative  compliance  approaches,  providing  guidance  to taxpayers concerning the interpretation and application of the law, making use of advanced rulings, and enhancing cooperation between BRITACʘM Member TAs.

Expediting tax dispute resolution

22. We recognize the importance  for BRI jurisdictions to  minimize  and resolve cross-border tax disputes in a timely and principled manner in order to better protect the legitimate rights of taxpayers on one hand, and to secure domestic tax base on the other.

23.  We  call  on  BRITACʘM  Member  TAs  to  respect  and  comply  with international standards, particularly those relating to Base Erosion and Profit Shifting and to Transparency and Exchange of Information for Tax Purposes, as well as those in tax treaties signed by their governments.

24.  We  encourage  BRITACʘM  Member  TAs  to  dedicate  resources  to relevant  parts  of  their  administrations  dealing  with   dispute   resolution procedures.

25. We will intensify the collaboration between BRITACʘM Member TAs to improve  dispute  resolution  mechanisms  and  explore  the  potential  of alternative  dispute  resolution  procedures   adaptable  to  the  needs  and circumstances of their home jurisdictions.

Streamlining tax compliance and digitalizing tax administration

26. Streamlined tax administration facilitated by digital technology helps to achieve the overarching objective of tax administrations to raise sufficient funds to finance public spending while responding to public demand for cost-effective and time-efficient services.

27. We encourage BRITACʘM Member TAs to streamline tax administration procedures, taking into account country-specific conditions. In light of this, we believe that  efforts  should be made in  enhancing  tax  administration cooperation, improving  taxpayer  service,  protecting  taxpayers’  legitimate rights, and avoiding arbitrary decisions on taxpayers’ compliance status.

28. We reaffirm our commitment to maximizing the benefits of emerging technologies   by    adopting    a   long-term    strategy    to    digitalizing    tax administration, improving  digital infrastructure within  tax  administrations and working to build improved taxpayer trust, privacy and data protection.

Enhancing tax administration capacity

29.  We  note  the  pressing  need  for  tax  administration  capacity  building amongst  BRI  jurisdictions.  We  will  prioritize  our  work  in  this  area  and support increasing efforts by international organizations,  in  particular,  the Platform  for  Collaboration  on  Tax,  in  assisting  BRI  jurisdictions  to accomplish the objectives of the  UN 2030 Agenda for Sustainable Development and the Addis Ababa Action Agenda.

30. We will fulfill our collective commitment to establishing an inclusive and sustainable  capacity  building platform  by promoting  training,  conducting research as well as sharing knowledge products and best practices of Member TAs and BRITACEG Members, particularly in the areas of following rule of law, raising tax certainty, expediting tax dispute resolution, streamlining tax compliance and digitalizing tax administration.

31. We will align our capacity building activities with other initiatives run by international organizations in an effort to avoid duplication and deliver the BRI  tax  administration   capacity  building  initiatives  in  a   coordinated, cost-effective and sustainable manner, which is tailored to the real needs of emerging and developing economies.

Future Actions

32. Wereaffirm that the BRITACʘM’s founding spirit is to bring together the BRI tax administrations on an equal footing to catalyze actions. Once we agree, we will  deliver.  To  guide  our work in  light  of this  spirit,  we  are committed to developing action plans which will be approved by the Council every two years so as to achieve tangible accomplishments. We adopt the Wuzhen Action Plan (2019-2021), and will brief on it at the Second Belt and Road Forum for International Cooperation which will be held during 25-27 April,   2019,  in  Beijing.  Annex   3  provides  the  Wuzhen  Action  Plan (2019-2021).

33. We thank China for its BRITACOF Presidency and its successful hosting of  the   first   BRITACOF  Conference.  We  look  forward  to  our  next Conference in Kazakhstan in 2020.

Annexes:

1.  List of BRITACʘM Council Members and Observers

2.  List of BRITACEG Members and Partners

3.  Wuzhen Action Plan (2019-2021)