The OECD Global Forum on Taxation’s Sub-Group, established at the Ottawa Forum last fall, was mandated to develop proposals for achieving a global level playing field.
The Sub-Group has been guided by specific Terms of Reference and an overall LPF objective: *”to achieve high standards of transparency and information exchange in a way that is fair, equitable and permits fair competition between all countries, large and small, OECD and non-OECD.”*
The OECD’s Global Forum met June 3-4 in Berlin to review the Sub-Group’s proposals. See the attached report on **”A Process for Achieving a Global Level Playing Field”** for an outline of these action steps, which have been endorsed by Global Forum participants.
Hans Eichel, Federal Minister of Finance presented opening remarks at the Berlin OECD Global. He said Germany will continue to promote the standards of international cooperation in tax matters that have been developed over the past few years in the EU, in groups such as the G7 or the G20 and in other fora.
Concerning the Sub-Group’s proposals, Minister Eichel said, *”The paper on Level Playing-Field Issues affords us the unique opportunity of distancing ourselves from past discussions and turning to quite specific – and in my view realistic – proposals. This will bring us closer to our objective of creating a global level playing-field”.*
He further pointed out that the Forum now has specific proposals for a comprehensive strategy by which a global level playing-field may be set up, and urged participants to focus on the recommendations *”that will enable us to proceed from discussing the concept to taking action to put it into effect.”*
In outlining the level playing field process, the Sub-Group stressed that the integration of *”individual, bilateral and collective”* elements will ensure that the necessary flexibility is given to the negotiation of bilateral agreements on information exchange, while at the same time collectively furthering the objective of a global level playing field through the Global Forum and through the initiatives of individual countries.
Of particular note are the three steps identified under the **collective** aspects of the process:
(a) Review the transparency and information exchange practices currently applied by financial centres;
(b) Assess the convergence of existing practices and evaluate the achievement of a global level playing field; and
(c) Involve significant financial centres that are not currently Participating Partners.
The Sub-Group’s proposals claim that the practices of OECD and non-OECD Participating Partners – and all other significant financial centres outside these two groups – do influence the achievement of the global level playing field. It says the inclusive approach is intended to communicate that no country be permitted to profit from being neither a party to the principles nor a part of the process. Taking note of this, the Global Forum has committed to engage all relevant countries in the process.
The report concludes: *”Individual, bilateral and collective actions in combination are necessary for the achievement of the common objective of the global level playing field: an international financial system characterised by fair competition, and which is free of the distortions created through lack of transparency and lack of effective exchange of information.”*
The first peer review of responses to the assessment of practices is scheduled for mid 2005, followed by preparation of a factual report by the Sub-Group, and a Fall 2005 Global Forum Meeting.