SGATAR
Study Group on Asia-Pacific Tax Administration and Research
The key measures or mechanisms to preventing disputes, and the performance of these measures or mechanisms
The effective and efficient dispute prevention and resolution can lead to enhancing tax certainty that has been emphasized by G20 as one of the priorities.
Tax uncertainty has been increasing in recent years. The COVID-19 pandemic accelerated digitalization by years, causing rapid business transformation of companies worldwide. Such new business environments have made taxpayers and tax authorities exposed to increased tax uncertainty, as well as more frequent and complex tax disputes. In addition, the introduction of new international tax rules such as Pillars 1 and 2 is making the tax landscape even more complex and a potential source of future disputes.
The potential for conflicts with taxpayers is increasing. While tax administrations have focused on policy and administrative measures to support businesses to combat the pandemic over the past few years, there is now a growing need to bolster efforts aimed at raising tax revenue in response to global fiscal deficits. It should be noted, however, that strengthening tax collection by tax administrations may trigger disputes with taxpayers.
The prevention and resolution of tax disputes is a topic of enduring interest within the international community. Particularly, the OECD Forum on Tax Administration (FTA) addresses the status of tax dispute prevention and resolution in each country through its annual publication, the Tax Administration Series. The following aspects are emphasized:
– Avoiding unnecessary legal proceedings through resolving disputes at the administration level;
– Leveraging digital technologies to improve efficiency of dispute resolution;
– Providing sufficient information such as guidance and advice to taxpayers, which is the key element in dispute prevention;
– International cooperation to prevent and resolve cross-border tax disputes.