Press Release

Need for systemic approach towards taxation in APEC region

25/07/2018

The second day of APEC Base Erosion and Profit (BEP) meeting was more focused on upgrading and introducing a systemic approach to taxation that would help regulate profit shifting for Papua New Guinea and other Asia Pacific Economic Cooperation (APEC) economies.

The second day of APEC Base Erosion and Profit (BEP) meeting was more focused on upgrading and introducing a systemic approach to taxation that would help regulate profit shifting for Papua New Guinea and other Asia Pacific Economic Cooperation (APEC) economies.

The Assistant Commissioner for Large Tax Office for the PNG Internal Revenue Commission and also the Chair for the Base Erosion and Profit Shifting (BEPS) and Automatic Exchange Of Information (AEOI) Technical Workshop, Sam Loi said the workshop provides a forum to exchange ideas between taxation authorities within the APEC region.

He said the workshop has introduced concepts through a session called Multinational Instruments, which is globally used.

“This is an instrument which tax authorities around the world and especially APEC economies have signed up to, in cases where the double tax agreements are not up to standard and creates a situation where base erosion or profit shifting happens and the rights of tax especially in PNG or any other country is lost.

“By signing up to this instrument, it rectifies the disadvantages in the bilateral agreements that PNG has signed in the past which he stated “dates back to the 1950’s and 1960’s.

“Within the meeting, economies will use the instrument to identify articles in bilateral agreements to conform to the multilateral instrument which is called the synthesized tax to serve as an equal right for business to ease revenue loss when doing business in another economy.

“They are fairly compensated for their economic activity, basically it takes away that profit shifting situation,” said Mr Loi.

The technical workshop ends this Friday with a presentation of the outcomes of the five-day workshop.