Sustainable tax governance in developing countries through global tax transparency - DeSTaT

The project "Sustainable Tax Governance in Developing Countries through Global Tax Transparency" (shortened DeSTaT), has been dedicated to study the impact of tax transparency on developing countries and emerging economies, with a focus on sustainability and development, which in turn can have an impact on tax systems and tax revenue in developing countries. The project is a research and collaboration project between research institutions and agencies in international tax law in Brazil, Colombia, South Africa, Uruguay, Austria and Norway, which started 1st July 2012 and ended on 30th September 2017. The project has been carried out on a bottom up approach. Local activities on agreed topics form the basis for the writing of altogether 15 comparative articles, which is the main scientific output of the project. The project aims for the main findings to have an impact on the development and implementation of the international rules on global transparency developed by the OECD. In that regard, the findings of the project were presented to the UN Committee of Experts on International Cooperation in Tax Matters in April 2017. Core recommendations of the project include that the need for global tax transparency should not force developing countries to implement policies that may not be sustainable for them because of highly complex rules that may be costly to implement and administer, and to the drafting of which they have not directly contributed. Rather, one should seek sustainable practices even if they do not meet the highest standards, like for instance transfer pricing rules with predetermined margins, contribution by developed countries to the costs of supplying information and caution with automatic exchange of information where sufficient degree of confidentiality is not in place (towards the outer world). Also, effective protection of taxpayers' fundamental rights are needed. Experience from the BRICS countries may play a bridging function.

The project will focus upon sustainable tax governance and the prevention of capital flight from developing countries to tax havens. The era of global transparency driven by the OECD is completely changing the international legal and tax framework, thus u rgently requiring research aimed at determining the implications for developing countries. Global fiscal transparency can turn tax treaties with exchange of information clauses into legal instruments for enhancing tax compliance and securing the effective ness of the levying of taxes in the tax jurisdictions of developing countries, thus protecting them from capital flight. Accordingly, fiscal transparency is important also for developing countries. Possible difficulties for developing countries to enter into such treaties and to implement and comply with them will be studied. The project will also aim at providing an empirical backing to the chiefly prescriptive top-down policy documents that have been issued so far on the subject, in particular through establishing contact with tax administrations in three South American and two African countries. On this basis, an ambition is to establish a set of best practices for tax administrations in developing countries. The project will be carried out by North and South research units, working on a commonly agreed pattern. The two North units are respectively based the University of Oslo (including a doctoral student) and at the WU Vienna University of Economics and Business. The South units are five antennae based in Brazil, Colombia, South Africa and Uganda and Uruguay. The output will be compared and discussed at yearly seminars. The research group aims at publishing the results of its research in different languages in specialized tax journals and other pu blications around the world. Further, research results will be communicated to Ministries of Finance in the participating countries.