In a communique issued after their summit, which held 30 November to 1 December 2018 in Buenos Aires, Argentina, G20 leaders reaffirmed their commitment to improving the international tax system on tax treaties and transfer pricing rule and to introducing international taxation system on cryptocurrency.
The leaders of G20, under section 26 of the declaration, commit to continue their work for a globally fair, sustainable, and modern international tax system based, in particular on tax treaties and transfer pricing rules, and welcome international cooperation to advance pro-growth tax policies. All measures will be taken by considering the OECD/G20 Base Erosion and Profit Shifting package, as it remains essential for all tax frameworks.
The G20 leaders will work together to seek a consensus based solution to address the impacts of the digitalization of the economy on the international tax system with an update in 2019 and a final report by 2020. Moreover, as part of the mission to strengthened international tax system, the leaders urged the all countries to commence the automatic exchange of financial account information and acknowledge the strengthened criteria developed by the OECD to identify jurisdictions that have not satisfactorily implemented the tax transparency standards. Subsequently, defensive measures will be considered against listed jurisdictions.
G20 leaders during the summit also signed a joint declaration to develop a regulatory framework for cryptocurrencies in accordance with Financial Action Task Force (FATF) standards. With the FATF standards, G20 leaders acknowledged the need to develop and establish a regulatory framework with special attention to cryptocurrencies and the digitization of the global economy. Moreover, as seen in Section 25 of the declaration, G20 leaders stated that they would regulate crypto-assets for anti-money laundering and countering the financing of terrorism in line with the standards.
The first review of the draft regulation will present during the next G20 in June 2019, in Osaka, Japan. By 2020, the final draft for cryptocurrency is expected to be ready for implementation.
Source: G20 Declaration
One of TPA’s technology partners Cygnet Infotech has developed a comprehensive VAT solution named R7VAT MTD, which is amongst others recently approved by HMRC for use by companies in the UK to automate and manage their VAT returns filing process but can also be used broadly within the EU.
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