Apec workshop aims to improve tax, profit rules

SOME of the profit-shifting tax agreements dates back to the 1950s and 60s when income tax legislation was set up, says the country’s tax office.
Assistant commissioner of Internal Revenue Commission Sam Loi, said this after an Advancing Base Erosion and Profit Sharing (BEPS) and Automatic Exchange of Information (AEOI) Priorities in Apec technical workshop in Port Moresby yesterday. Loi, who is also chairman of the meeting, said it was on multilateral instruments which tax authorities around the world and in Apec had signed up to.
“Signing up to this instrument sort of corrects, or rectifies some of the disadvantages in bilateral agreements that we have signed in the past,” he said.
“In cases where the current or the existing double tax agreements are not up to standard, in terms of its potential to create a situation where base-erosion or profit-shifting happens, the right of tax in PNG or any other country is lost.”
Loi said the instruments provided for the 21 Apec member economies to identify articles in the bilateral agreements.
He said there were concerns in PNG in terms of certain industries which IRC thought were not paying the right amount of tax.
“Domestically, we are waiting for the National Executive Council to endorse some of these instruments that we are trying to sign up to,” Loi said.
“That will provide more intelligence information to our tax authorities – not only to PNG but to other countries as well.”