8 minute read 25 Jun 2019
A photographic portrait of  Hans christian holte

How ‘world’s tax administrator’ views broad range of global tax issues

Chair of the OECD’s Forum on Tax Administration says “giant steps forward have been made in tax transparency” since global financial crisis.

As Director General of the Norwegian Tax Administration and the chair of the Organisation for Economic Co-operation and Development (OECD) Forum on Tax Administration (FTA), Hans Christian Holte can be described as “the world’s tax administrator.”

“Giant steps forward have been made in tax transparency after the global financial crisis a decade ago,” he tells Chris Sanger, our Global Tax Policy Leader.

The 50-jurisdiction FTA includes OECD and non-OECD countries and is the OECD’s subsidiary body that encourages tax authority leaders to come together and collaborate on ideas that they hope will improve tax administration for governments and taxpayers alike.


The FTA, which also comprises a number of specialist networks, including the Joint International Taskforce on Shared Intelligence and Collaboration (JITSIC), dates in various iterations to 2002. Factors including the “fair share” debate, the new era of tax and financial transparency, and the advent of the Base Erosion and Profit Shifting (BEPS) have led to increases in the number of countries engaged in FTA work and in how widely and deeply the group cooperates.

In fact, even the last few years have led to an acceleration in the closeness of FTA members and their willingness to share their leading practices and experiences. Sanger has had a first-hand view of participating in the FTA, as we have been involved in helping the FTA’s digital transformation subgroup.

Three pillars

Holte says that FTA members collaborate on ongoing projects and through communities of interest, which currently include the shadow economy, behavioral insights, digital transformation, data analytics and risk management, as well as “enduring programs” including the JITSIC. All of these are grouped under three broad pillars:

  • Support for the international agenda
  • Improved compliance
  • Future tax administration

Focus on implementation

The FTA’s focus is “on implementation rather than policy, although it will provide important feedback and input to the policymaking process, too,” Holte says. With the spotlight falling on tax administrations, he says, they are questioning how they can simultaneously:

  • Enhance compliance
  • Tackle tax crime
  • Reduce administrative burden on taxpayers
  • Support economic growth through effective implementation, internal change and engagement with taxpayers

Engagement with taxpayers, Holte says, is a particularly important aspect of any tax administrator’s tactics.

In a paradigm shift

We also specifically discussed digital transformation with Holte, asking for his views on whether corporate taxpayers should expect a slow-but-steady progression of changes around the world or more of a disruptive, seismic paradigm shift to full digitalization and corporate systems “talking” directly to those of the tax authority.

Holte says he believes the paradigm shift is already happening, with significant implications at both national and international levels. If this shift is addressed properly, he says, “I think we could balance both efficiency and simplicity, and also take care of data protection and privacy issues.”

The administrative burden

The administrative burden on business was another key issue. The move to fully digital tax administration can be viewed with hope, but also concern about how taxpayers will fare. We have agreed to invest significant time and resources on doing more to track digital tax developments — across both the policy and administrative dimensions — in far more detail, and across a range of more than 60 countries.

On the administrative side, a number of countries are adopting Standard Audit File for Tax (SAF-T) requirements. As much as tax authority leaders hope that digitalization will eventually reduce the overall compliance burden, businesses say the exact requirements they must meet in each country are wildly different, not to mention rapidly changing.

“The introduction of SAF-T was designed to standardize the production and reporting of accounting information, making the taxpayer’s data available for further analysis and reconciliation,” Holte says. He also believes that work being undertaken in the FTA on the International Compliance Assurance Programme (ICAP), risk assessments and joint audits in particular has an important role to play here in identifying different approaches and the reasons behind them.

Addressing uncertainty

Reduction in administrative burden suffered by taxpayers is welcome. But against a backdrop of global change and reform, increased transparency and more aggressive scrutiny of taxpayers, another similar theme has risen to the top of the agenda of the OECD and other bodies supporting the tax community: tax uncertainty.

Regarding the automatic exchange of country-by-country (CBC) reports between tax authorities, the OECD says that more than 1,400 exchange relationships have been activated; as a result, many of our clients ask about whether the exchange of CBC reports will drive more inquiries and, ultimately, tax disputes.

Holte says the reports “represent an unprecedented opportunity for tax authorities to use information on the global activities of a multinational group in conducting their risk assessment.” He says that the Country-by-Country Reporting Handbook on Effective Tax Risk Assessment, released by the FTA in 2017:

  • Provides guidance to tax authorities
  • Identifies the types of risk indicators they may be able to detect
  • Discusses some of the challenges that will be faced by revenue authorities, such as dealing with fake positives

CbCR reporting is not the only potential source of uncertainty facing taxpayers in 2018, of course; far from it. With the OECD’s Multilateral Instrument (MLI) entering into force the day after the 30 June 2018 start of CbC report exchange, taxpayers will have another source of uncertainty to address: the advent of a new, untested Principal Purpose Test (PPT).

More than 110 jurisdictions have committed to implement a minimum standard on tax treaty abuse. They are doing so through the inclusion of anti-abuse provisions, including the PPT, that are specifically defined in the final BEPS Action 6 report.

Asked whether a PPT creates uncertainty for taxpayers, Holte says “a PPT inevitably introduces a degree of uncertainty, since it is intended to do what more detailed anti-avoidance rules cannot achieve by taking a broader purposive approach.” A common, international standard on the PPT in the OECD Model Tax Convention, he believes, should lead to a more consistent international approach on tax treaty abuse.

However, he says, “It is up to taxpayers and their advisors to reflect on exactly where the appropriate boundaries of tax planning lie against the backdrop of what BEPS is trying to achieve — namely that tax is paid where substantive economic activity takes place.”


Creating uncertainty is one thing, of course; reducing it is quite another. Almost coinciding with Holte’s taking over the FTA came the piloting of the new ICAP program. ICAP has been designed and is supported on an ongoing basis by the OECD. The ICAP pilot started in January 2018 and will last around 18 months. It involves eight jurisdictions — Australia, Canada, Italy, Japan, the Netherlands, Spain, the UK and the US — with two others, France and Germany, participating in observer roles.

Under ICAP, a group of countries — not always the full eight — will work with the taxpayer to review a package of relevant documentation, including the taxpayer's CbC reports and, if all is well, the company will receive assurance that they will not receive further compliance interventions from the covered tax administrations for a period of two years — at least, not driven by their CbC reports, assuming such reports do not change materially.

Any issues that cannot be agreed via ICAP (and therefore require further attention) will be handled outside of ICAP, via processes such as advance pricing agreements (APAs) or, when deemed necessary, a tax audit.

Expanding ICAP’s scope and coverage may present future challenges for the OECD. “There are clear challenges,” Holte says, “around how tax administrations and taxpayers manage the right level of resource if ICAP is rolled out more widely — always on a voluntary basis, I might add.

“But as we progress, it is likely that we will identify ways we can standardize the provision of information and streamline processes — including making more of virtual interactions,” he says. “As we progress, it is likely that we will identify ways we can standardize the provision of information and streamline processes — including making more of virtual interactions.”

Transitioning to a post-BEPS world

ICAP represents a novel and innovative approach to developing more tax certainty. Although joint or simultaneous audits (and multilateral APAs, despite their limited number) are arguably multilateral in nature, ICAP is the first formal, highly visible, multi-country tax certainty program to be launched. One of its stated objectives is to deliver taxpayers higher levels of certainty and assurance. Another is to encourage taxpayers to change their behavior over time, transitioning more smoothly to a “post-BEPS” world.

Asked whether the FTA could develop a similar multilateral program that might help taxpayers move from pre- to post-BEPS structures more effectively, Holte says it is something the FTA is gradually moving toward. “It should be possible over time,” he says, “to be clearer on what the characteristics are that allow tax administrators, either individual or collectively, to categorize multinationals as lower risk.

“This would not only help multinationals in setting their own risk parameters, but also help focus the work of tax administrations on areas of high risk and reducing tax uncertainty.”

Final thoughts

Asked whether he had any other messages he would like to communicate to our clients, Holte says that “giant steps forward have been made in tax transparency after the global financial crisis a decade ago” and that “tax authorities have to live up to their responsibilities to protect taxpayer information.” He encourages taxpayers to keep the lines of communication open in these “new days for all of us.”

This article was originally published in Tax Insights on 4 Jun 2018.


Hans Christian Holte, Norway’s Tax Commissioner and the chair of the Organisation for Economic Co-operation and Development’s Forum on Tax Administration, can be described as “the world’s tax administrator.”

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