Tax: The role of ICAS in the GAA

Donald-Drysdale By Donald Drysdale for ICAS

18 July 2018

ICAS punches above its weight internationally, and Donald Drysdale explains its contribution as a founder member of the GAA and an active member of its Tax Director Group.

The Global Accounting Alliance

ICAS is a founder member of the Global Accounting Alliance (GAA), formed in 2005 to provide thought leadership on accounting issues, coordinate interaction with regulatory bodies and use the combined knowledge of accountants around the globe in the public interest.

The GAA plays an important role internationally by creating working links among ten leading professional accountancy bodies in significant capital markets. It works with national regulators, governments and stakeholders, through member-body collaboration, articulation of consensus views, and working in collaboration where possible with other international bodies, especially the International Federation of Accountants (IFAC).

How we work together

An explanation of the relationship between ICAS and the other members of the GAA can be found here on the ICAS website. The GAA passport scheme offers practical help to members of any GAA body living or working in another of the GAA countries.

The other members and links to their websites are as follows:

Together these ten organisations represent close to 1 million members in over 180 countries around the globe.

The GAA and tax

The Tax Director Group of the GAA, currently chaired by Michael Croker from CAANZ, meets twice a year. At these meetings the tax directors discuss key legislative and administrative developments in their countries, comparing notes and seeking opportunities to share best practice.

They also meet key people and organisations in each country where they convene, to learn from the workings of their tax systems and key organisations involved in tax. So far the group has met in eight of the ten countries in which it has representative bodies, with only Germany and Hong Kong still to hold meetings.

At its most recent meeting, in Washington DC in April, the group met US Treasury officials and a representative of the Senate Committee on Finance. The group also examined key aspects of the US tax regime, including the Tax Reform Act, the Joint Committee on Taxation, and the Taxpayer Advocate Service.

US tax was not the only focus. Each of the tax directors took the opportunity to set out the major changes and challenges facing them in their own country.

In New Zealand, a Tax Working Group appointed by the government is taking a refreshingly fundamental look at the structure, fairness and balance of the country’s tax system, based on five key questions.

  • What does the future of tax look like to you?
  • What is the purpose of tax?
  • Are we taxing the right things?
  • Can tax make housing more affordable?
  • What tax issues matter most to you?

In September 2018 the Tax Working Group will release an interim report before issuing their final recommendations in February 2019.

In the Republic of Ireland, the Coffey Review on the future of corporation tax published its report in September 2017, and this was followed by a public consultation, the outcome of which is still awaited.

In Australia, the Inspector-General of Taxation has still not published the conclusions of his review into the future of the tax profession at a time when it faces significant changes as a result of digital disruption. Whilst these changes present challenges, they also provide opportunities to significantly improve the administration of the tax system and deliver far-reaching benefits to the entire community.

ICAS Director of Taxation Charlotte Barbour took the opportunity to report to the meeting on recent developments in the UK, with particular emphasis on the progress of devolution in Britain and increasing divergence of tax rules between Scotland and the rest of the UK. Tax issues around Brexit were highlighted by the participants from ICAEW, ICAS and CAI.

Sharing information and expertise

Global accounting standards, auditing standards and ethical standards should transcend borders, and the GAA professional bodies share their knowledge and expertise across a wide range of topics. The guidance ‘Professional Conduct in Relation to Taxation’ is a regular agenda item.

Articles from the latest issues of GAA Accounting are published online, and a selection of tax-related articles can be found here.

Recent contributions have included the following:

  • 'Professional conduct in relation to taxation (from ICAEW)'
  • ‘Building a statutory transfer pricing regime’ (from HKICPA)
  • ‘Should we tax robots?’ (from CPA Canada)
  • ‘The right way to declare and pay dividends’ (from ICAS)
  • ‘Growth, development and accounting: seeing the bigger picture’ (from ICAEW)
  • ‘Making Tax Digital 2018’ (from ICAS)
  • ‘The default solution for world trade’ (from CAI)

Unlike accountancy, tax rules are largely peculiar to each jurisdiction – although concerted action to overcome base erosion and profit shifting (BEPS) has brought some changes to this. Each country has its own tax regime and businesses or individuals operating across borders have to address interactions between tax systems. ICAS and its fellow GAA member bodies gain greatly from the tax co-operation that exists among them.

Article supplied by Taxing Words Ltd