"We agree to extend the cooperation on the following issues of tax policy and tax administration, including development of a BRICS mechanism to facilitate countering abusive tax avoidance transactions, promotion of effective exchange of information," said a joint communique issued after the two-day meeting of the heads of Revenue of these nations.
The BRICS countries, it said expressed concerns at the erosion of the tax base by practices that involve abuse of tax treaty benefits, incomplete disclosure of information and fraudulent claims.
The five nation grouping made a commitment to address these concerns by preventing the base erosion and profit shifting through mutual cooperation, the communique added.
The countries also vowed to strengthen the enforcement process by taking appropriate actions for non-compliance and putting more resources on international cooperation, sharing of best practices and capacity building to deal with cases of profit shifting by way of complex multi-layered structures.
The countries agreed establish a governance framework by May, 2013, in accordance with the overall BRICS commitment to continue the process of cooperation in tax administration.
During the two-day meeting the officials deliberated on issues of mutual concerns related to tax administration, including those pertaining to international taxation, transfer pricing, cross border tax evasion and avoidance, tax dispute resolution mechanisms.
The communique also expressed an agreement amongst BRICS Countries for working together towards capacity building, improvement of systems and sharing of resources, and aims at extending it to the area of tax administration in a way that will benefit the people of BRICS Countries. (MORE)