Organisation for Economic Co-Operation and Development
CTPA Roundtable on Selected Tax Issues Related to
Collective Investment Vehicles
1-2 February 2006
Patricia McClanahan
Securities Industry Association
The Securities Industry Association (SIA)1 would welcome a examination by the OECD's
Committee on Fiscal Affairs and its Centre for Tax Policy and Administration (CTPA) of
the growing use of collective investment vehicles for cross-border investments and
whether appropriate treaty relief from withholding taxes on dividends, interest and gains
from these investments is being provided.
Today's withholding tax results too often impede the efficient flow of capital across
borders by causing investors in CIVs to bear tax and/or associated administrative costs
not borne by similarly situated direct investors. As a result, many countries' fiscal
policies of encouraging cross-border investment are being undermined, with indirect
investors seeking collective investment options that do not suffer a withholding tax
burden.
The problems that CIVs and their investors encounter obtaining treaty relief arise in
many contexts, from publicly traded retail funds to collections of pension funds seeking
administrative efficiencies, and do not all suggest the same solutions. What the problems
have in common, however, is that they should benefit from serious multilateral efforts to
improve on the status quo without sacrificing important tax administration goals.
SIA believes there is a very good prospect that OECD work in this area, undertaken in
close cooperation with the financial community, could yield proposals for change that
would benefit both member governments and investors. Governments would benefit
from more effective implementation of their country's economic policies concerning
cross-border investment. Investors would obtain more collective investment
opportunities free of unintended withholding tax penalties.
This Roundtable creates an important opportunity for business and public sector
representatives to explore the issues and the possibilities for constructive change. SIA
looks forward to continuing to work toward solutions to the technical and practical issues
presented by CIVs.
1
The Securities Industry Association brings together the shared interests of approximately 600 securities firms to
accomplish common goals. SIA members (including investment banks, broker-dealers, and mutual fund companies) are
active in all U.S. and foreign markets and in all phases of corporate and public finance. According to the Bureau of Labor
Statistics, the U.S. securities industry employs nearly 800,000 individuals, and its personnel manage the accounts of
nearly 93-million investors directly and indirectly through corporate, thrift, and pension plans. (More information about
SIA is available at: www.sia.com.)