ATAF Technical Review of the Platform for Collaboration on Tax Discussion Draft: The Taxation of Offshore Indirect Transfers – A Toolkit

ATAF is delighted to publish the first in a series of ATAF technical papers on a variety of tax issues that are of high importance to our members. The paper provides a technical review by ATAF of a Discussion Draft produced by a collaboration of the IMF, OECD, World Bank Group and United Nations on the key issues relating to the offshore indirect transfer of assets, a tax planning scheme used by multinational enterprises to avoid paying capital gains tax in the country where these valuable assets are located.  

This Discussion Draft is one of a number of toolkits being produced by the IMF, OECD, World Bank Group and United Nations, the partner members of the Platform for Collaboration on Tax. The stated aim of the toolkits is to assist developing countries in the appropriate implementation of responses to international tax issues under the G20/OECD Base Erosion and Profit Shifting (BEPS) project as well as additional issues of particular relevance to developing countries that the BEPS project does not address.

The Draft provides analysis, options and recommendations for the tax treatment of what is often referred to as offshore indirect transfers. This is an important tax issue for African and other developing countries as shown by the Zain case in Uganda where the tax at stake was purported to be USD85 million which is reported to be approximately 5% of total government revenue. The report is therefore very relevant to many ATAF members.

This technical review by ATAF provides an overview of the key issues covered in the Discussion Draft and ATAF’s views on those key issues. Please contact the ATAF Secretariat if you have any questions relating to the review.

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