India will lead both working groups. The meeting also approved terms of reference of the BRICS Tax Support Network. Addressing the BRICS Heads of Tax Authorities meeting in New Delhi, Sitharaman said the proposed working groups would create a sustained platform for developing economies to address tax issues that have traditionally imposed higher administrative and capacity costs on them. “Transfer pricing disputes cost developing-country administrations disproportionately. Revenue frameworks that don’t fit our fiscal realities distort how we are seen and how we see ourselves,” she said.
Also Read: Where’s the GDP debate? The world is raising a toast to India
Sitharaman said international tax rules are being renegotiated through several multilateral processes and developing economies had an “essential” perspective in the ongoing multilateral negotiations, including talks on the proposed UN Framework Convention on International Tax Cooperation. “The decisions made in these processes over the next few years will shape cross-border taxation for a generation,” she said.
Elaborating on the role of two working groups, revenue secretary Arvind Shrivastava said that the two working groups are being proposed as longer-term institutional mechanisms within the BRICS tax track. The International Taxation and Transfer Pricing Working Group will provide a platform for BRICS tax administrations to share experience on treaty interpretation, transfer pricing audits, advance pricing agreements and the Mutual Agreement Procedure, while also enabling greater coordination in ongoing multilateral tax negotiations.
Also Read: SBI expects surplus from new UPI MDR as issuing, acquiring bank
He said the international taxation and transfer pricing group would create a permanent platform for BRICS countries to exchange experience on tax treaties, transfer pricing audits and dispute-resolution mechanisms, besides supporting greater coordination in multilateral negotiations, including talks on the proposed UN Framework Convention on International Tax Cooperation. The second group, on Revenue Statistics, will seek to develop a framework for measuring fiscal performance that reflects the economic and revenue structures of BRICS economies, rather than relying on assumptions derived from substantially different economies.