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ISSN 1684-9833 • Year 3 / No.12 /June 29, 2012


The Executive Secretariat Informs CIAT Participates in the 5th Annual ABA Tax Section Conference on U.S.–Latin America Tax Planning Strategies000

We invite you to CIATalks, the space provided by CIAT. Read the posts, give your opinion and actively participate. The Executive Secretariat Informs CIAT Participates in the 5th Annual ABA Tax Section Conference on U.S.–Latin America Tax Planning Strategies International Seminar “NeoConstitutionalism: Challenges and Risks” Seminar on alternative methods of taxation of multinationals

During June 14-15, 2012, the CIAT Executive Secretary, Mr. Márcio Verdi, attended the subject American Bar Association tax section conference and participated in the Government Roundtable discussion. The panel also included tax officials from Chile and Mexico, as well as, tax professionals from the US and several Latin American countries. This year’sconference was held in Miami, Florida. During the discussion the panel addressed issues, recent developments, and legislative proposals in international taxation. Included in the discussions were recent shifts to territorial systems, transfer pricing, foreign tax credit limitations, information exchange, withholding taxes, transparency, and joint audits of global businesses. Mr. Verdi spoke on the challenges that tax administrations in this region face regarding transfer pricing issues and the examination of multinational enterprises. He added that it is important to have an open dialogue on these issues between the tax administration, taxpayers and the tax practitioner community in order to effectively resolve tax issues and controversies.

The Tax Administrations Inform Brazil - The Federal Revenue has launched the project “Get to know our Customs” Costa Rica – Sales General return statements submitted and paid online Canada - The Canada Revenue Agency (CRA) reduces the compliance burden for small businesses El Salvador - Ministry of Finance Implements Customs Simplification Law Paraguay – The Ministry of Finance launched the tax training days program Uruguay -Management commitment between the Ministry of Economy and Finance and the Tax Administration for the year 2012 IBFD News Training New in the web Other Documents

Picture – Main Table




International Seminar “Neo-Constitutionalism: Challenges and Risks” The International Seminar “Neo-constitutionalism: challenges and risks” was held on June 13, 14 and 15, 2012 at the Hilton Columbus - Isabella the Catholic Hall. It was attended by 140 participants; among them we had the presence of international delegations such as Peru, Dominican Republic, Uruguay, Spain, Colombia, Mexico, and national authorities and delegates from courts, ministries, chambers, public servants and officials of the Internal Revenue Service.

We invite you to CIATalks, the space provided by CIAT. Read the posts, give your opinion and actively participate

CIAT is a public international organization which groups the tax administrations of 40 countries, (31 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.


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 Web Site:

The event was opened with the words of the Director of Operations and Institutional Management, Mr. Francisco J. Beiner, representative from the Inter-American Center of Tax Administrations-CIAT, the Director of Fiscal Studies Center of Ecuador, the National Legal Director, and the Director of Internal Revenue Service of Ecuador, Econ. Carlos Marx Carrasco, who took the opportunity to highlight that Ecuador, since October 20, 2008 has adopted a Constitution that establishes a new form of State, called “Constitutional State of Rights and Justice” which main characteristics are: the recognition of the highest regulatory character of the Constitution, the direct application of the Constitution as law, and the recognition of constitutional jurisprudence as a primary source of law. The seminar included the participation of distinguished international speakers from the University of the Andes (Colombia), Dr. Carlos Gaviria Diaz, the University of Valencia (Spain), Dr. Roberto Viciano Pastor; the Head of the Tax Legislation Unit from the Ministry of Finance and Public Credit of Mexico, Dr. Germain Huerta Herrera and Dr. Luis Duran Rojo from the Catholic University of Peru. It is also worth mentioning, the outstanding speech of the President of the Constitutional Court, Dr. Patricio Pazmino, from Dr. Juan Morales Ordonez of the Catholic University of Azuay; from Dr. Rafael Oyarte of the Catholic University of Quito, and Dr. Ramiro Avila, Professor of the Andina University- Simon Bolivar.



Seminar on alternative methods of taxation of multinationals CIAT participated on June 13 and 14 of the current year in the event organized by “Tax Justice Network”, KEPA and the Ministry of Foreign Affairs of Finland. This event was held in the city of Helsinki and its purpose was to discuss alternatives for taxing multinational businesses. The seminar called “Transfer Pricing: Alternative Methods of Taxation of Multinationals” was inaugurated on June 13 with opening remarks by Messrs. John Christensen, Director of Tax Justice Network; Erikki Tuomioja, Minister for Foreign Affairs of Finland and Ms. Heidi Hautala, Minister for International Development of Finland. Present in this event were participants from different spheres, which allowed for objective conversations regarding the “arm’s length principle”, the methods for its application and alternatives thereto, based on country experiences, studies and achievements by experts and academicians. Among other organizations attending were OECD, ICEFI, the European Commission, IBFD, the Universities of Michigan (USA), Hebrew (Israel), Tampere, Queensland, Wayne State and Lancaster; several NGOs and communications media; the Ministries of Finance of Finland and India; the tax administrations of Nigeria, Ecuador, Mozambique, Indonesia, Dominican Republic and the People’s Republic of China. The CIAT Director of International Cooperation and Taxation, Mr. Gonzalo Arias, made a presentation on the main issues to be considered by the Latin American tax administrations when implementing or applying their rules for controlling the harmful manipulation of transfer prices. The event concluded with a general panel on future actions to be considered, with interesting proposals made by several of the delegates present. Likewise, a meeting was held on June 15 for discussing the future of taxing multinational corporations.

The Tax Administrations Inform Brazil - The Federal Revenue has launched the project “Get to know our Customs” The project “Get to know our Customs,” consists in a specific program of visits to the Federal Revenue Service facilities providing customs services. The initiative is part of the transparency policy of the Federal Revenue and is intended to enlighten the public opinion about the important role that the Ministry of Finance, through the Federal Revenue has been providing to protect the national economy and the society. The visits of the public to the facilities of the Federal Revenue Service will be held twice a year in July and on the International Customs Day, January 26th. This year, we have set the date for the visits on July 4th. The project involves the presentation of an institutional video, a conference about the Federal Revenue role in providing customs services and a guided tour by an agent who will answer questions about the operation of the facility. In Parana, for example, the Customs Federal Revenue of Brazil in Paranagua and the Federal Revenue Secretariat of Brazil in Foz de Iguazu will be open for visits. With respect to the visits to Foz de Iguazu, they can be programmed through the telephone number (45) 3520-4301, since the visits will take place at the headquarters of the Federal Revenue facilities. Flávio Antonio Araujo Corresponsal



Costa Rica – Sales General return statements submitted and paid online Since June 15, both individuals and legal entities are required to submit sales general return statements online, through the aid program EDDI-7, where the taxpayer makes the payment and submission of statements from his office or home, which saves time and money since he does not have to queue in collecting agencies to acquire the form and file the statements. With this system, carrying cash to pay taxes is not needed because the taxpayer can make the payment from the bank website. The taxpayer will have the option to choose between eleven financial institutions that have the connectivity system for payment of sales taxes, through the website or the bank´s cashier. Maribel Zúñiga Cambronero Correspondent

Canada - The Canada Revenue Agency (CRA) reduces the compliance burden for small businesses A key CRA priority is to make it easier for businesses to comply with Canada’s taxation system, while at the same time maintaining the system’s integrity and fairness. Over the past five years, the CRA has addressed all 61 recommendations made by the Agency’s Action Task Force on Small Business Issues, making significant progress in reducing the paper burden for small businesses. Established in the summer of 2006, the CRA’s Action Task Force was a joint public/private sector task force composed of small business owners, representatives from a number of key business organizations, and senior CRA and Industry Canada officials. Its mandate was to identify CRA’s administrative practices that imposed the greatest burden on small businesses and to develop solutions that would systemically reduce this burden. Maria Pica Correspondent

El Salvador - Ministry of Finance Implements Customs Simplification Law The Deputy Minister of Revenue Rene Mauricio Guardado expressed that the new reform to the Customs Simplification Law approved by the Legislative Assembly is part of the customs modernization process. This innovation launched the National Customs modernization process in accordance to the best world customs practices and taking into account the import and export sectors as well as businessmen, Special Customs Representatives, Customs Brokers, International Freight Transport, responsible for imports, and personnel involved in foreign trade activities. Ramón Pérez Gómez Correspondent



Paraguay – The Ministry of Finance launched the tax training days program The Ministry of Finance through the Secretariat of State Taxation (SET) in the framework of the European Union support program with the Government of Paraguay in the fiscal sector, launched the second edition of the conference called “The Ministry of Finance in Your Community “ to promote tax awareness among the citizens. Each day will consist of three parts: -

Fun activities with children and adolescents under the Tax Education program at an educational facility.


Seminars on taxation with the presence of national and international speakers


Area of consultation for the participants of the seminar which will provide information on services provided by the Ministry of Finance and publications by this Secretary of State will be delivered.

Elizabeth Fernández de Corrales Correspondent

Uruguay -Management commitment between the Ministry of Economy and Finance and the Tax Administration for the year 2012 The Ministry of Economy and Finance and the Tax Administration agreed and implemented Management Commitments for the biennium 2005/2006 and for 2007, 2008.2009, 2010, 2011 with very positive results in the different performance dimensions of the Directorate. Source: Web site - DGI Uruguay Margarita Faral Correspondent



IBFD News International Bureau of Fiscal Documentation (IBFD) Cooperation-CIAT - IBFD

This section includes a selection of the IBFD news about aspects of tax policies and tax administration. This information is available on the CIAT website and in Fridays Tax News alert.

Training Enrolment open for the Specialized Program on Tax Law and Tax Administration The CIAT and the Externado University of Colombia within their cooperation agreement are inviting all Tax Administrations officials of the CIAT member countries, as well as the general public, to participate in the Specialized Program on Tax Law and Tax Administration. In order to participate, a registration form must be filled out and send to capacitacion@ciat. org indicating the name of the specialized program and the rest of the requirements. We will receive until June 13 your registration forms for the second group which will start on July 2, 2012.

New in the web Bibliographic News June, 2012

This document provides for reference purposes, the most recent documents produced by CIAT and other editorials in the month of June; either articles or other periodic publications, research works and studies of interest.

Other Documents “Estimación de la Recaudación Potencial del Impuesto a la Renta en América Latina” Estimation of potential tax collection income in Latin America Macroeconomics of Development Series, No. 120 June, 2012 ECLAC

The present study addresses the potential collection of income tax in Latin America. It begins by analyzing the current importance of taxation on income compared to developed countries, both in share of total revenues and in composition within the taxation. Since it shows that its importance in relation to the parameters of advanced countries is reduced, and that in its composition the taxes on wages are dominant, the purpose is, in the second part of the study, to analyze whether there is room to increase the revenue from the income tax in general, and specifically, the one related to individuals, depending on the characteristics of the different economies of Latin America.



Taxation and Equality in Latin America.

The Woodrow Wilson International Center for Scholars. Latin American Program. Editors Cynthia J. Arnson, Marcelo Bergman, and Tasha Fairfield Since 2003, levels of inequality in several Latin American countries have improved, sometimes dramatically. Explanations for the decline in inequality include an increase in quality employment and wages and government social expenditures. However, notwithstanding some improvements on the expenditure side, systems for collecting tax revenue in the region remain highly regressive: they have done little to improve inequality and in a number of cases have contributed to its worsening.

Los Gastos Fiscales como Herramienta para el Desarrollo Econ贸mico ethos Fundaci贸n April 2012

Tax expenditures as a tool for economic development arise from an effort to identify measures to boost the Mexican economy. Today, most people assume that the only tool to give life to public policies and, specifically to economic policy, is the direct spending. However, the State has other essential instruments such as tax expenditure.