Target audience

The workshop is designed for senior tax officers with some practical experience in auditing MNEs and existing knowledge of the main principles of international taxation. A high level of English communication skills is an advantage.

Course description

The OECD’s partnership program on taxation has the primary objective of promoting global economic development. The program aims to enable countries to secure their tax bases and to provide a tax environment that promotes international trade and the flow of foreign direct investment. The program engages OECD and non-OECD economies in a policy dialogue to promote the development and use of best practices in the tax area.

In this context the way tax authorities deal with multinational enterprises is of fundamental importance. This event is aimed at exploring some of the legal and practical issues faced by auditors responsible for international work.

The purpose of this event is to:

• first, to examine the features and tax treatment of Multinational Enterprises (MNEs), the specific international taxation issues they raise, the compliance issues they face and the planning opportunities that are peculiar to these types of entities;
• second, to examine and share the “best practice” approaches that are adopted to deal with these entities by OECD countries as well as participants in the workshop.

Focus

The workshop will cover the features of MNEs and the ways in which their profits are taxed.

The international nature of MNEs and in particular their conduct of cross-border transactions present compliance and audit issues that are of particular concern when dealing with MNEs. In this respect, the event will look at:

• auditing tax treaty issues, including where MNEs are a resident for tax purposes and the identification of permanent establishments;
• auditing cross border related party transactions, including the application of the OECD’s arm’s length principle;
• auditing issues connected to the development and use of intellectual property;
• auditing cross border financing flows: including the problems presented by thin capitalization and the use of hybrid instruments.

Contributions from participants

The workshop is structured around an extended case-study that will span most of the week. This will involve participants working in small groups to assimilate and discuss detailed information arising from the audit of a fictitious MNE. Groups will be asked to use that information to identify and prioritize issues and to develop an auditing strategy. There will be opportunities during the week to discuss technical issues such as the arm’s length principle and for participants to share their approaches to the various practical issues that arise. The case study will involve some role-play.

Participants should be prepared to share their experiences in dealing with MNEs, taking into account in particular the existing rules in their home country for obtaining the information needed in order to carry out an effective audit.

In addition, participants are asked to make a short country presentation on practices specific to their country. There are two topics to be addressed:

• Topic 1: Information Powers: What authority does your tax agency have to collect information for purposes of taxation?
• Topic 2: Practical aspects of auditing: risk assessment and enquiry management: What is the process in your country?