Of all the hackneyed aphorisms that grate on my undertaxed mind, that one about nothing being certain except death and taxes has got to be prime candidate for the next cull of the English language.
So, I was both irritated and fascinated when it was brought to my attention that Monday last week was the first ever Tax Certainty Day. We have become used to ‘Days’ designed to make us more aware of everything from climate change to world health, but why a day to make us more aware of something we are all so painfully aware of already? After all, there is no Death Day (or is there?). My appetite for information was further whet by the news that the center of the celebrations was the City of Love itself.
Never underestimate the ability of tax to underwhelm.
It turns out that Tax Certainty Day is not about the inevitability of paying taxes, but rather about achieving certainty over how much to pay. It was marked at the OECD headquarters in Paris, where – rather than enjoying a day of tax non-deductible booze – the participants were presented with the OECD report on the 2018 Mutual Agreement Procedure (MAP) statistics. Add to that, presentations from Austria and France (the only justification for singling out these particular two countries apparently being the two world wars fought between them), and a suitably drab day must have been had by all.
Tax professionals like statistics, and this was a day for league tables of which countries had started and finished the most mutual agreement procedures (broadly, the discussions between international tax authorities to resolve disputes over taxing rights in specific international transactions), how long the procedures took on average, how many related to transfer pricing and how many to other transactions, how many were withdrawn, how many were not resolved, and so on.
Now, judging by the reporting of the occasion, these statistics must have been quite intoxicating, because there seemed to be a fair degree of back slapping for hitting the top of the various categories, and a degree of back turning to those at the bottom. This appears utter nonsense. While MAP is a competitive sport involving two opposing teams, there was evidently no category of winners, and it takes two to tango for timely dispute resolution. Manchester City’s emphatic 8-0 demolition of Watford last weekend did not entitle Watford to equal points for helping their opponents wrap up the game in the first half. Furthermore, quick resolution may just reflect a tax authority’s willingness to ‘have a go’ at charging a taxpayer while caving in as soon as they get around the table, or alternatively, their support of aggressive tax planning. It is perhaps not a coincidence that Malta came top in the speed stakes (2 months). Saudi Arabia, a country justly maligned for so much, was perhaps unfairly singled out as the only country sporting no MAPs. It could be that they are just very fair tax-wise to foreign companies (unfortunately I have no first-hand knowledge of that particular jurisdiction’s practices).
Second in the league table of aphorisms for the gallows must surely be that one about lies, damned lies and statistics. Like guns, statistics are highly dangerous when they fall into the wrong hands.
Time for an International Statistics Awareness Day?