Harmful Tax Practices – 2023 Peer Review Reports on the Exchange of Information on Tax Rulings

161. Botswana can legally issue the following three types of rulings within the scope of the transparency framework: (i) preferential regimes;1 (ii) cross-border unilateral APAs and any other cross-border unilateral tax rulings (such as an advance tax ruling) covering transfer pricing or the application of transfer pricing principles and (iii) establishment rulings.

162. For Botswana, past rulings are any tax rulings within scope that are issued either (i) on or after 1 January 2016 but before 1 April 2018; and (ii) on or after 1 January 2014 but before 1 January 2016, provided still in effect as at 1 January 2016.

163. In the prior years’ peer review report, it was determined that Botswana’s undertakings to identify past rulings and all potential exchange jurisdictions were sufficient to meet the minimum standard. Botswana’s implementation in this regard remains unchanged, and therefore continues to meet the minimum standard.

164. For Botswana, future rulings are any tax rulings within scope that are issued on or after 1 April 2018.

165. In the prior years’ peer review reports, it was determined that Botswana’s implementation of a new system to identify future rulings and all potential exchange jurisdictions was sufficient to meet the minimum standard. Botswana’s implementation in this regard remains unchanged, and therefore continues to meet the minimum standard.

166. In the prior years’ peer review reports, it was determined that Botswana did not yet have a review and supervision mechanism for past and future rulings under the transparency framework. Therefore, Botswana was recommended to put in place a review and supervision mechanism as soon as possible.

167. During the year in review, it is not known whether Botswana undertook any additional work and therefore, the prior years’ recommendation remains.

168. Botswana has met all of the ToR for the information gathering process except for having in place a review and supervision mechanism. Botswana is recommended to put in place a review and supervision mechanism, as soon as possible (ToR I.A.3).

169. In the prior years’ peer review reports, it was determined that Botswana did not have the necessary domestic legal basis to exchange information spontaneously. Botswana can only exchange information on request. Botswana is undergoing a comprehensive reform of its tax laws. In prior years’ peer review reports Botswana noted that it has commenced a review of the exchange of information legislative framework with the support of the African Tax Administration Forum (ATAF) with a view to correcting identified shortcomings in this area. Botswana noted that this review was delayed.

170. Botswana has international agreements permitting spontaneous exchange of information, including (i) the Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol (OECD/Council of Europe, 2011[2]) (“the Convention”) and (ii) bilateral agreements in force with 28 jurisdictions.2

171. In the prior years’ peer review reports, it was determined that Botswana is currently developing a process to complete the templates on relevant rulings, to make them available to the Competent Authority for exchange of information, and to exchange them with relevant jurisdictions. Therefore, Botswana was recommended to continue its work to complete its processes for the completion and exchange of information as soon as possible. As it is not known whether action has been undertaken on this aspect during the year in review, the recommendation remains in place.

172. It is not known whether Botswana issued rulings during the year in review. Therefore, no data can be reported on the timeliness of exchanges of information.

173. Botswana is recommended to continue its efforts to put in place a domestic legal framework allowing spontaneous exchange of information on rulings and to complete the templates for all relevant rulings and to ensure that the exchanges of information on rulings occur as soon as possible (ToR II.B).

174. As there was no information on rulings exchanged by Botswana for the year in review, no statistics can be reported.

175. In the prior years’ peer review reports, it was determined that Botswana’s information gathering and exchange of information processes for matters related to intellectual property regimes3 were sufficient to meet the minimum standard. Botswana’s implementation in this regard remains unchanged and therefore continues to meet the minimum standard.

[1] OECD (2021), BEPS Action 5 on Harmful Tax Practices - Terms of Reference and Methodology for the Conduct of the Peer Reviews of the Action 5 Transparency Framework, OECD Publishing, Paris, http://www.oecd.org/tax/beps/beps-action-5-harmful-tax-practices-peer-review-transparency-framework.pdf.

[3] OECD (2015), Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance, Action 5 - 2015 Final Report, OECD/G20 Base Erosion and Profit Shifting Project, OECD Publishing, Paris, https://doi.org/10.1787/9789264241190-en.

[2] OECD/Council of Europe (2011), The Multilateral Convention on Mutual Administrative Assistance in Tax Matters: Amended by the 2010 Protocol, OECD Publishing, Paris, https://doi.org/10.1787/9789264115606-en.