OECD Recognizes AIFC’s Tax Regime to Comply with Global Tax Transparency Standards

1883

According to the release, the Base Erosion and Profit Shifting (BEPS) practices cost countries $100–240 billion in lost revenues annually, which is the equivalent of 4-10 percent of the global corporate income tax revenues. 

OECD Recognizes AIFC’s Tax Regime to Comply with Global Tax Transparency Standards

The Astana Times – The Organization for Economic Co-operation and Development (OECD) announced the tax regime of the Astana International Financial Center (AIFC) complies with global standards of tax transparency in its recent report.

“The introduction of Substantial Presence requirements and the resulting OECD recognition lays the foundation for the development of a complete and more transparent financial services market. Legislative requirements will minimize the spread of shell companies for the purpose of tax evasion, which will positively affect the overall quality of the developing home market,” reported the AIFC’s press service.

According to the release, the Base Erosion and Profit Shifting (BEPS) practices cost countries $100–240 billion in lost revenues annually, which is the equivalent of 4-10 percent of the global corporate income tax revenues. This is the result of the abuse of gaps and inconsistencies between the tax systems of different countries.

The OECD and the G20 member countries created the Inclusive Framework on Base Erosion and Profit Shifting in 2016. As a result, more than 135 countries and jurisdictions implement 15 actions to combat tax evasion, improve consistency of international tax rules, ensure a more transparent tax environment and address tax problems arising from the digitalization of the economy.

One of the OECD recommendations was to implement Substantial Presence requirements for Kazakhstan to comply with BEPS. In 2021, the Astana Financial Services Authority and the Ministry of Finance adopted the Rules on Substantial Presence of the AIFC participants applying tax exemptions for the payment of corporate income tax, value added tax. The AIFC participants enjoying tax benefits for the payment of corporate income tax and value added tax should confirm their presence in the AIFC.