Organisation for Economic Co-operation and Development
Classification of payments to
deposit insurance and financial
stability schemes
Maurice Nettley
OECD Centre for Tax Policy and Administration
16-18 November 2010
Centre for Tax Policy and Administration
Secretariat’s questionnaire
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Reports on responses by Delegates to the Secretariat’s
questionnaire on classification of payments made by
banks and other credit institutions to insure deposits
made by customers
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Asks for comments by Delegates on the Secretariat’s
proposals for taking the topic forward
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Questionnaire
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3
Asked Delegates to describe any schemes operating
under 3 headings
- similar to Swedish stability scheme
- similar to financial sector interventions operating in
the UK
- other schemes being operated with similar aims
Asked for each scheme whether any payments received
are being classified as tax revenue or fee for a service
in National Accounts or as tax revenues in OECD
Revenue Statistics
Schemes reported by Delegates (1)
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4
Responses received from 21 countries
Reported schemes provisionally allocated into one of six
groups listed in Annexes A-F of the paper ( subject to
comments from Delegates )
Schemes reported by Delegates (2)
A -Stability fee schemes (4)
B -Schemes similar to UK deposit protection scheme (2)
C -Other government sector scheme (6)
D -Fund operated outside the government sector (10)
E -Non-state scheme backed by deposit takers (3)
F -Voluntary schemes (2)
2 countries reporting that no schemes exist
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Classification of payments made as tax
revenues or fee for service (1)
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Taxes defined as compulsory unrequited payments to
government
Taxes are unrequited in the sense that benefits
provided by government to taxpayers are not normally
in proportion to their payments
Classification of payments made as tax
revenues or fee for service (2)
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Under these definitions, payments made under the
schemes listed in Annexes D, E and F cannot be
considered as taxes
- D payments are not being made to government
- E transaction is between banks and an institution
outside the government sector
- F participation is voluntary
There are a number of different practices being
operated in the schemes listed in Annex A-C
Classification of payments made as tax
revenues or fee for service – Annex A
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4 countries reported Stability fee schemes
The payments will be classified as tax revenues in the
National Accounts of Germany, Hungary and Sweden
Of these, only Hungary want to classify as a tax in
OECD Revenue Statistics
The United States expect to classify the payments as a
fee for service
Classification of payments made as tax
revenues or fee for service – Annex B
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2 countries reported schemes in the category of scheme
operating in the United Kingdom
In Australia, the priority claim on assets is treated as a
fee for service but any further levy to overcome the
shortfall would be treated as a tax
In the United Kingdom, the realisation of assets is
treated as a capital tax in National Accounts but not in
OECD Revenue Statistics
Classification of payments made as tax
revenues or fee for service – Annex C
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6 countries reported other government sector deposit
schemes
In Canada, the payments are classified as taxes in both
National Accounts and OECD Revenue Statistics
In Denmark, the payments are not part of public
administration in the National Accounts
In Australia, Belgium, Germany, and the United States,
the payments are classified as a fee for a service
Definition of the term ‘unrequited’
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Tax payment is compulsory with no direct provision of a
service whereas a fee is paid for a specific service
But a payment could be regarded as a fee and not a tax
even when there is no specified provision of a service
for a particular entity if payments are entirely channelled
back to the sector of the economy where companies are
subject to the payment
This is the case for the stability fee in some countries –
as the levy is made on all firms eligible for support , it
may be unrequited for an entity but for the sector as a
whole it does finance a potential service
Proposals for next steps
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Delegates to propose any comments and corrections to
the text in Annexes A-F including proposals to switch
schemes between Annexes
Any submissions by Delegates not so far responding
can be added to the summary
Secretariat to provide a paper for the May 2011 WP2
meeting with proposals for the way forward on
classification issues eventually leading to agreed
changes to the text of the OECD Interpretative Guide
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Thank you and any questions?