ICC Document & publication

ICC Comments on the Platform for Collaboration on Tax Discussion Draft: The Taxation of Offshore Indirect Transfers

The draft aims to help developing countries tackle the complexities of taxing offshore indirect transfers of assets.

ICC welcomed the opportunity to provide comments on the Platform for Collaboration on Tax Discussion Draft: the Taxation of Offshore Indirect Transfers – A Toolkit.

The draft Toolkit is a product of Platform for Collaboration on Tax – a joint effort between the United Nations, the International Monetary Fund, the World Bank and the Organisation for Economic Cooperation and Development. The draft aims to help developing countries tackle the complexities of taxing offshore indirect transfers of assets.

The tax treatment of offshore indirect transfers has emerged as a significant concern in many developing countries particularly, given the possibility that by selling interests indirectly, investors can avoid capital gains taxation in the country where those underlying assets are located. Despite the concerns associated with this practice, there is no unifying global principle on the treatment of these transactions. ICC appreciates the work of the Platform in this area and to collectively produce toolkits for developing countries for appropriate implementation of responses to international tax issues.

The Platform’s Toolkit discusses economic considerations that may guide policy in the area of offshore indirect transfers, including: the types of assets that could appropriately attract tax when transferred indirectly offshore, the implementation challenges that countries face and options for enforcing such a tax.

To this end, ICC provided further input on the effectiveness of the Toolkit and the scope and usefulness of the definitions provided for, as well as on the broader concerns related to offshore indirect transfers addressed in the draft toolkit.