ISSN 1684-9833 • Year 1 / N°7/ May 14, 2010
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The Executive Secretariat Informs Lt. Col. Stefano Gesuelli visited the CIAT headquarters On May 11, Lt. Col. Stefano Gesuelli, Head of the International Cooperation Office of the Guardia di Finanza of Italy and CIAT Correspondent, visited the CIAT Executive Secretariat headquarters.
The Executive Secretariat Informs Lt. Col. Stefano Gesuelli visited the CIAT headquarters
On this occasion, Mr. Gesuelli, met with the Executive Secretary, Mr. Márcio F. Verdi, the Heads of the Missions of France and Spain before CIAT, as well as the Executive Secretariat directors and coordinators. Discussions were based on the CIAT activities program, and areas and activities of mutual interest were identified and added, to further strengthen the close relationship and support of Italy to CIAT’s activities.
Standard for the exchange of electronic invoices CIAT participated in International Tax Compact’s “Core Group Meeting” The 3rd meeting of the Permanent Committee on Harmful ITP ended successfully The Tax Administrations Inform Brazil reaches 1 billon electronic invoices
Lt. Col. Stefano Gesuelli (center) accompanied by the Executive Secretary, Márcio F. Verdi (right) and Francisco Beiner, Institutional Development and Event
CRA’s Community Volunteer Income Tax Program IRS considers increasing the asset limit to $ 10 million Guatemala held forum on Tax Havens New Units in Jamaica Tax Administration have positive impact Over 600,000 taxpayers filed Income Tax Returns in Peru The Dominican Republic’s DGII restructures its tax education portal Training Publications ¡Were you aware that!... ¡¿Really?!
Standard for the exchange of electronic invoices The working team designated within the electronic invoice group to design a standard and protocol that may technically permit the exchange of electronic invoices between the countries, met in Salvador, Brazil, on May 4 to 6. The meeting was sponsored by the State Secretariat of Finance of Bahía and ENCAT.
The meeting concluded with the design of a mechanism based on mutual trust between tax administrations, whereby an administration may consult invoices that may be of interest to it, regarding foreign trade as well as for other fiscal purposes. The exchange standard, based on XML will include a series of common and minimum standard information in terms of identification, control and amounts.
A procedures manual and the XML schemes will be available in 60 days and it is likewise expected that the tax administrations of Brazil and Mexico will test them for approximately 60 days. CIAT is a public international organization which groups the tax administrations of 38 countries, (29 Amarican countries, 6 European countries, 2 African countries and one Asian country), for the purpose of providing an integral service for the modernization of those administrations, by promoting their evolution, social acceptance and consolidation through the exchange of knowledge, experiences and the rendering of specialized technical assistance.
Executive Council Executive Secretariat The e-CIAT Newsletter is published and distributed electronically biweekly.
CIAT participated in International Tax Compact’s “Core Group Meeting” International Tax Compact held its “Core Group Meeting” in Brussels, Belgium on April 26, 2010. Issues discussed dealt with strategic aspects for the consolidation of ITC, such as the possible contribution of its parnters, its working structure and coordination with other work initiatives. Various key aspects and activities to be carried out were determined for which reason the meeting turned out to be highly successful. The CIAT representatives in this meeting were Messrs. Socorro Velazquez, International Tax Specialist and Gonzalo Arias, International Cooperation Manager. Other participants included the following organizations and countries: African Tax Administration Forum (ATAF),the European Commission, France (Ministry of Foreign Affairs), IMF, The Netherlands (Ministry of Foreign Affairs), Norway (Ministry of Foreign Affairs), OECD, Switzerland (State Secretariat for Economic Affairs), Spain (Ministry of Economic Affairs), United Kingdom (DFID), United Nations, Germany (Ministry of Economic Cooperation and Development), Permanent Representation in the European Union, GTZ, KfW and German Development Institute).
The 3rd meeting of the Permanent Committee on Harmful ITP ended successfully Contact us: CIAT Executive Secretariat / e-CIAT Newsletter P.O. Box 0834-02129 Panama, Republic of Panama. Phone (507) 265-2766 / 265-5994 Fax: (507) 264-4926 E mail:firstname.lastname@example.org Web Site: http://www.ciat.org
The 3rd face-to-face meeting of the Permanent Committee on the Control of Harmful International Tax Planning which, since its establishment has been sponsored by the Federal Administration of Public Revenues (AFIP) of the Republic of Argentina was held in Mar del Plata, Argentina on April 7-9, 2010. Present in the meeting were the CIAT Director of Studies and Training, María Raquel Ayala Doval, the CIAT International Cooperation Manager, Isaac Gonzalo Arias Esteban, Pablo Porporatto, President of the Committee and the following authorities of the sponsoring organization: the Deputy General Director of Examination, the Director of International Taxation and the Director of the Mar del Plata Region.
Other participants were officials from the tax administrations of Brazil, Canada, Costa Rica, Dominican Republic, France, Kenya, Mexico, Paraguay, Portugal, Spain and Uruguay. The discussions were based on structural and contents aspects of the 4 working lines adopted by the Committee (Study on Comparative Legislation, Study on Tax Havens, Data Base on Harmful International Tax Planning Schemes and Instruments and Study on the Control of Operations that Involve Intra-group Services). Likewise, guidelines for concluding the working guidelines through the Committee›s virtual communication platform were determined. It is also worth mentioning that a representative from Tax Justice International (TJI)was given the opportunity to comment on some of their interesting projects for combating harmful international tax planning.
The Tax Administrations Inform Brazil reaches 1 billon electronic invoices Last week the number of electronic invoices issued by taxpayers in Brazil exceeded one million. This is indeed a far from negligible number, considering in addition, that these documents are authorized and remain at the Tax Administration of Brazil.
The Executive Secretariat congratulates the Federal Revenues of Brazil and the state tax administrations for this very important achievement. It must be added that many are the trees that will be grateful.
Shown in the picture, from left to right: Socorro Velázquez, International Specialist; Raúl Zambrano Valencia, Technical Assistance Manager and Carlos Martins, State Secretary of Finance.
CRA’s Community Volunteer Income Tax Program The Community Volunteer Income Tax Program (CVITP), offered by the Canada Revenue Agency (CRA), works within communities across the country to help complete income tax returns for eligible individuals who have simple tax situations. Volunteer tax preparer clinics are organized by local community centres. Trained by the CRA, volunteers dedicate their time to helping individuals in their community with their income tax returns. Who is eligible? You qualify to take advantage of the CVITP if you meet the income eligibility requirements and have a simple tax situation, are unable to complete your income tax and benefit return by yourself, and are unable to pay for assistance. How does the CRA impact the program? The CRA supports the program by providing access to a local coordinator, training, promotional products, the donation of surplus computers, and free tax software to assist volunteers in the preparation of simple, straightforward returns. Community organizations are responsible for following the policies of the program, maintaining the confidentiality of taxpayer information, hosting the volunteers, and managing the resources necessary to hold tax preparation clinics. Maria Pica Correspondent
IRS considers increasing the asset limit to $ 10 million Commissioner of Internal Revenue Douglas Shulman said his agency would consider raising the $10 million asset cutoff for taxpayers who would be required to report uncertain tax positions under a new proposal, based on the comments it receives from the tax community. Help for Small Businesses Emphasized He said the agency is seeking to help small businesses in myriad ways as it implements a variety of legislation enacted over the past 15 months to speed economic recovery.
For example, Shulman said, IRS already has administered $9 billion in benefits under two stimulus measures allowing a five-year carryback of net operating losses to a wide range of taxpayers. He noted the agency has “redoubled our efforts” to let taxpayers know about available small business deductions and credits. Shulman told lawmakers he has instructed IRS employees to work with struggling small businesses and other taxpayers in a “flexible and principled” way to assist them. Change in Offer in Compromise Program Cited In response to questions from Small Business Chairman Nydia Velazsquez, the IRS commissioner noted the agency made “a major change” in its offer in compromise program, allowing agents to make decisions on agreements based on current income instead of looking at the last three years of a taxpayer’s income. Outreach a Priority, Shulman Says He stressed the agency’s outreach efforts and several times noted IRS’s weekend “open houses” where taxpayers can go to resolve issues quickly, frequently on a same-day basis, with personnel on hand from various departments in the service to make decisions on the spot. Raúl Pertierra Correspondent
Guatemala held forum on Tax Havens One of the initiatives carried out by Guatemala for being taken out of the Grey List of the Global Forum on Transparency and Exchange of Information, was the organization by the Vice-president of the Republic of the Forum on “Tax Havens: The OECD’s Standard of Tax Transparency”. This forum was held on April 14, with the participation of the Director of the Global Forum on Transparency and Information Exchange, Mr. Pascal Saint-Amans; the Minister of Finance of Costa Rica; the International Consultant, Fernando Velayos; the Superintendent of Banks; the Superintendent of Tax Administration and the Minister of Public Finance of Guatemala. There were also representatives from the private sector, the Congress of the Republic and the public sector in general, who were informed about commitments acquired before the international community, in relation to the implementation of mechanisms for the exchange of tax information with other countries. These involve the signing of at least twelve information exchange agreements and the legal reforms that may allow access to banking information and knowing the identity of the stockholders of corporations and businesses in Guatemala. Manfredo Chocano Alvarado Correspondent
New Units in Jamaica Tax Administration have positive impact Three (3) new Units established by the Jamaica Tax Administration on April 1, 2009, as part of its ongoing reform, have had a positive impact. The Customer Care Centre (CCC), Large Taxpayer Office (LTO) and the Forensic Data-mining Intelligence Unit (FDIU) have each reported positive results in the first year of their operations. The Customer Care Centre (CCC), in addition to resolving tax queries and issues, provides an outbound service, where courtesy calls are made to taxpayers reminding them of upcoming filing and payment dates, as well as contacting persons who are less than 30 days in arrears. The CCC has received 28,900 calls and made 62,500 taxpayer contacts which resulted in J$16.9B being collected for the financial year ending March 31, 2010. In respect of the Large Taxpayer Office (LTO), the assigning of Client Relationship Managers (CRM) to specific industries has played a significant role in improving the relationship between the Tax Administration and large taxpayers. On the Audit and Collections side, the LTO achieved 96% of its J$500M audit target and collected in excess of J$75B, representing 28.2% of total tax Revenue for the financial year.
The Forensic Data-mining Intelligence Unit (FDIU) collected information from various databases and cross matched them with tax records. The FDIU focused on specific groups based on risk analyses, identifying over 5,000 new taxpayers, persons on record who had stopped filing and persons who were underreporting their income and have identified potential tax of just under J$6B. Based on the success reported by the Units, their capacity will be strengthened and operations expanded during the fiscal year 2010-2011. Meris Haughton Corresponsal
Over 600,000 taxpayers filed Income Tax Returns in Peru Annual Income Tax Returns filed increased as a result of the additional services implemented by the National Tax Superintendency (SUNAT) and the tax responsibility of the taxpayers. Thus, 605,034 returns were registered in the 2009 period, which figure represents an 8% increase with respect to the previous year. It must be noted that 571,103 returns (94%) were filed through Virtual SUNAT, using the virtual forms (PDT), which imply a significant time savings for the taxpayers, who no longer have to visit a tax collection office to fulfill his/her obligations. The collection entity made available 239 PDTs at the Taxpayer Service Centers throughout the country, 110 in Lima and 129 in the rest of the provinces, free modules which provided personalized orientation regarding the completion of the return. The Personalized File was also available through Virtual SUNAT. This is a computerized document with all the information on income and tax payments made in 2009, thus facilitating the inclusion of the data in the return. This year there were over 140,000 downloads of this document, with a 10% increase in its use with respect to the previous year. Clara Loza Ramírez Correspondent
The Dominican Republic’s DGII restructures its tax education portal The General Directorate of Internal Taxes of the Dominican Republic (DGII) is permanently being updated and as part of this process, it has restructured its Tax Education portal, which is framed within the strategic guidelines for promoting a new national tax culture by means of educational actions, training and information aimed at encouraging citizens to participate and value tax issues. The main objective is to promote tax awareness among the population through the design, development and application of educational programs aimed at improving taxpayer behavior in relation to voluntary and timely compliance with their tax obligations. Training of future taxpayers The new tax education portal provides the necessary information for training future taxpayers (pre-taxpayers). Nieves Vargas Collado Correspondent
Training Call to the 13th International Tax Seminar “The Role of Fiscal Policies facing the World Economic Crisis” June 16 th – 18th, 2010, Havana, Cuba.
Publications New in the Web CIAT Manual on Human Resources Management in the Tax Administrations The CIAT Human Resources Management Manual is the result of the Working Group coordinated by the CIAT Executive Secretariat, with the co-sponsorship of the General Directorate of Public Finances (DGFIP) of France. The group was formed by expert officials on the subject matter from Barbados, Brazil, Chile, Guatemala, Honduras, Italy and Peru.
Tax Estimates This website has been created by Mr. Fernando Raul Martin, with the aim of gathering information about “Tax Revenue Economy”.
Our documents CIAT Examination Manual The Examination Manual is the result of the tasks of the Working Group on Examination, coordinated by the CIAT Executive Secretariat and sponsored by the Netherlands. Expert officials on the subject from some of the Tax Administrations of the CIAT member countries contributed their vast experience in the preparation of this Manual. The Examination Manual emphasizes the description of the risk management process and the resources required for its development.
¡Were you aware that!..
Regulated Internal Control System (RICS) Developed in 2008, in the form of a Manual, the Regulated Internal Control System consists of a series of documents whose objective is to provide a general framework for the establishment and maintenance of effective internal controls and which also describes the models that may be used by the internal auditing entity of a Tax Administration.
History of the first Credit Card In 1949, Frank X. McNamara, head of Hamilton Credit Corporation, went to lunch with Alfred Bloomingdale, a close friend of McNamara and grandson of the founder of the store, “ Bloomingdale “, and Ralph Sneider, McNamara’s attorney. The problem was that one of McNamara’s clients borrowed some money and could not pay for their financial problems . This particular customer had gotten into trouble before when he gave the number of cards (available for individual shops
Other documents of interest and service stations) to their poor neighbors who needed a few things in an emergency. Unfortunately for humans, many of his neighbors could not pay the short term and was forced to borrow money in the Hamilton Credit Corporation. At the end of dinner with his two friends, McNamara reached for his wallet in his pocket to pay for food (in cash). He was shocked when he discovered that he had forgotten his wallet, he felt he had no financial freedom . To its shame, had to call his wife to take some money . McNamara vowed it would never happen again. Merging the two concepts of the dinner, the loans without fraud credit cards and not having cash to pay for food, McNamara came up with a new idea, a credit card that can be used in multiple locations. What was new in this concept was that there would be an intermediary between companies and their customers. McNamara had the idea that there is only one credit card. McNamara discussed the idea with Bloomingdale and Sneider, the three got together some money and started a business in 1950 which they called “ Diners Club “. The Diners Club was to act as intermediary. Instead of individual companies offering credit to their customers (which they would have to pay later), the Diners Club was designed to provide credit to people for several companies (of course, would charge customers and pay the companies). Previously, companies made money with their credit cards through which they asserted that customers buy at her shop in this particular thanks to sales levels remained high. However, the Diners Club needed a different way to make money since they did not sell anything. To make a profit without charging interest (interest on credit cards came much later), the companies that accepted credit card Diners Club charged a fee of 7 percent for each transaction while the card requesting had to pay an annual fee of $ 3 (started in 1951). The first credit card Diners Club in 1950 was distributed to 200 people (mostly friends and acquaintances of McNamara) and accepted by 14 restaurants in New York. The cards were plastic, but were made of a type of paper with the places that accepted it printed on the back. However, the concept of the card grew and by the end of 1950, 20,000 people were using the credit card Diners Club. Source: Curiosidades y Errores Históricos