Anticorruption Policy: Enhancing the Role of the Asian Development Bank in Relation to Tax Integrity (Working Paper)

Institutional Document | September 2016

This working paper sets out the proposed response of ADB to global developments in relation to addressing tax secrecy, tax evasion, and legal forms of aggressive tax planning at both the country and project levels.

These tax integrity issues are of present and pressing global concern. While these issues adversely affect both developed and developing countries, the effect of lost tax revenues on developing countries in Asia is comparatively more severe.

In the context of ADB’s nonsovereign operations, tax integrity issues may arise whether the shareholding structure is located onshore (where the project is located) or offshore (in another jurisdiction). Tax integrity issues arise primarily (though not exclusively) through the use of offshore jurisdictions and cross-border structures. ADB acknowledges that there are numerous legitimate reasons for the use of structures involving offshore jurisdictions, including tax optimization to eliminate double taxation on income and profits as well as other operational, management, and administrative efficiencies and flexibility, especially where structures involve multiple international investors in numerous jurisdictions. However, ADB also recognizes that offshore structures may pose higher risks because these structures have greater potential to obscure beneficial ownership and sources of funds, and thereby more easily facilitate corruption, tax evasion, money laundering, financing of terrorism, and other illicit purposes.

This document is being disclosed to the public prior to its consideration by ADB’s Board of Directors in accordance with ADB’s Public Communications Policy 2011.

Contents 

  • Introduction
  • Global Developments
  • Role of ADB
  • ADB’s Existing Approach to Tax Integrity
  • Proposed Update
  • Resources
  • Request for Board Guidance
  • Appendixes

Additional Details

Type
Subjects
  • ADB administration and governance
  • Anticorruption and integrity in ADB operations

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