Grace Perez-Navarro discusses her lengthy profession on the OECD Centre for Tax Coverage and Administration and what’s subsequent after her retirement.

This transcript has been edited for size and readability.

David D. Stewart: Welcome to the podcast. I am David Stewart, editor in chief of Tax Notes At the moment Worldwide. This week: swish exit.

Grace Perez-Navarro has been a mainstay of the tax group for 3 a long time, working first on the IRS Workplace of the Chief Council, and later on the OECD Centre for Tax Coverage and Administration (CTPA). She has labored below two separate CTPA administrators, and most not too long ago took over for Pascal Saint-Amans after his departure.

However now Grace is ready to maneuver on. As her retirement approaches, Tax Notes chief correspondent Stephanie Soong caught up together with her to debate her plans for the longer term in addition to her time within the trenches of tax coverage.

Stephanie, welcome again to the podcast.

Stephanie Soong: Thanks for having me.

David D. Stewart: Might you inform us a bit about what you talked about with Grace?

Stephanie Soong: Nicely, we talked a bit bit about her profession trajectory: how she began out in Houston, Texas, ended up in Paris, France; the impact her work has had on worldwide tax coverage; the way forward for the OECD as a standard-setting physique. We talked about her accomplishments and what she’s most happy with, what she needs she might have labored on throughout her tenure on the OECD. We simply needed to get a way of her last departing ideas about her profession on the OECD.

I have been overlaying her since 2011, like 2012, so it has been a very long time. So it was a very nice dialog. It is all the time nice to see Grace. She’s all the time been an excellent supply and [I] want her all the most effective in her future endeavors.

David D. Stewart: All proper, let’s go to the interview.

Stephanie Soong: All proper, properly, thanks a lot, Grace, for coming by our studio within the Tax Analysts constructing. It is an honor to have you ever right here. Particularly because you’re tremendous busy nowadays. So thanks for coming.

Grace Perez-Navarro: My pleasure. It is my first time right here. Possibly my first time in Falls Church.

Stephanie Soong: Oh, wow. Nicely, hopefully not your final, however you are all the time welcome again. I simply needed to catch you earlier than you permit the OECD, which is absolutely the top of an period. I have been overlaying you since mainly once I began in 2011, so a really very long time. Will probably be unhappy to see you go, however we needed to ask you a number of questions earlier than you permit and get your ideas on how your profession has taken off, the place you are going, what are you doing subsequent? What can we count on from the OECD within the years you are not there, which is absolutely unhappy?

Let me simply begin by asking — your journey to grow to be the top of the CTPA began in Houston, Texas. You have been on the IRS’s Chief Counsel Workplace within the Nineteen Nineties, and also you have been engaged on worldwide tax points like negotiating tax treaties and knowledge trade agreements. Inform us extra about your profession trajectory. Did you ever look forward to finding your self the place you are actually?

Grace Perez-Navarro: No, I assume it relies upon how far again you go. I am undecided I might have anticipated to have grow to be a tax lawyer. However I used to be speaking not too long ago with another tax attorneys, and we have been all speaking about how what we cherished about tax was the pliability, the fixed change in tax, and the way it isn’t strictly black and white. There’s so many alternatives to play with tax. I believe that’s what attracted me to it, the complexity of it and the flexibility of it. And so I did find yourself going to the IRS in Houston, working totally on litigation.

I used to be very excited to be given the chance to go to Washington to work within the — what was then the brand new — worldwide division as a result of I had all the time needed to work on worldwide points. My litigation background from Houston served me very properly. I had been doing a little tax shelter litigation there. After which I acquired to Washington and began engaged on Brazilian international tax credit score circumstances. I am nonetheless working with Brazil, however on totally different points. However that was actually attention-grabbing.

As a result of I converse Spanish, I began engaged on the Mexican tax treaty, different tax treaties. And I imply, I cherished it. I cherished my work in Houston. It was a variety of enjoyable doing litigation. I actually favored doing tax treaty negotiations and likewise the worldwide litigation, which was a lot tougher than the litigation we have been doing in Houston, as a result of rather more was at stake.

The litigation groups on the opposite facet have been a lot greater. We have been mainly like two individuals. It was rather more difficult, but additionally actually fascinating. All of that was nice. After which the chance arose to go to the OECD for one yr, and that finally translated into greater than 25 years. And, I’ve actually loved it.

It has been a really exhausting job. It is had its political ups and downs, relying on who’s in not solely the White Home, however in different management roles around the globe. However I do suppose we have achieved an incredible quantity on the OECD throughout my tenure. I imply, once I was employed, one of many huge points, and I believe a part of the explanation Jeffrey Owens employed me, was to work on financial institution secrecy, which is what I had instructed him was one thing that wanted to be fastened.

I used to be very pissed off in Washington after we would get the sphere auditor saying they can not get data out of Switzerland, like the paths have been resulting in Switzerland. And I might say to Treasury, “Please go and terminate that treaty.” And so they’d say, “Yeah, yeah,” and are available again with a brand new treaty. It was one thing that might not be resolved unilaterally. Despite the fact that the US is the primary economic system on the earth, it nonetheless was not in a position to deal with this concern alone. I believe that’s the largest achievement of the OECD, is having the ability to carry nations collectively to facilitate change in basic areas, the place nations in any other case could not resolve the issue.

So it has been only a nice profession for me doing that. Then with the BEPS (base erosion and profit-shifting) venture, making so many adjustments in so many nations and bringing so many nations collectively to work on these points. And doing the after-sale service, all of the capability constructing and help for nations and all of the totally different packages we have put in place — just like the Tax Inspectors With out Borders, which is absolutely serving to growing nations quite a bit. For each greenback we put in, it is a $120 return on common. You possibly can’t get that sort of return on something. So it has been actually fantastic.

I’ve to say I’ve loved each job. So if I had stayed on the IRS, I believe I might’ve been very comfortable there. However being on the OECD, we’re in a position to have influence actually on a worldwide scale. And that has been very rewarding.

Stephanie Soong: You formally retire on the finish of March. Final we talked, you have been about to grow to be the director of the CTPA. How has it been for you these previous few months? And your tenure, how has it been?

Grace Perez-Navarro: Nicely, it has been very difficult. It is an odd time to grow to be director, for 5 months earlier than retiring. It has been a really difficult interval. We’ve got not solely the pillars to ship. Getting pillar 2 out the door was a giant carry, however we did it. In order that was difficult, however we did it.

We nonetheless have the multilateral conference to ship. And that’s shifting alongside, however it’s not simple. After which we launched the Inclusive Discussion board on Carbon Mitigation Approaches, one other main initiative the place we’re attempting to carry over a 100 nations collectively to work on this concern.

All of that has made it for a really intense interval. So I am undoubtedly not cruising to the end line.

Stephanie Soong: Yeah, the Inclusive Discussion board on Carbon Mitigation Approaches, I believe, is tremendous necessary too, particularly due to that report from the U.N. saying that we’ve got to make some main progress by 2030-2050 or else we’ll see some actually critical environmental results. In order that’s an enormous deal.

Clearly you have been the primary girl to grow to be a CTPA director. How vital was this for you? And the way vital is it for you that you just’re passing the baton on to Manal Corwin?

Grace Perez-Navarro: Nicely, I did not truly consider it a lot as being the primary girl, so that did not actually affect me a complete lot. I’m very comfortable I am passing it on to a different girl. I assume it did not matter a lot for me as a result of it was a restricted tenure, however I’m comfortable to see that we’ll have a girl on the head of CTPA and likewise such a succesful girl. So I am actually comfortable about that.

We do have only a few girls on the high of CTPA. We solely have Zayda Manatta, who’s the top of the World Discussion board. And we’ve got now Sandra Knaepen, appearing as the top of one of many divisions. However we have to do higher. And so I am glad that at the least on the very high we’ve got a girl.

I’ve been struck over the previous few months what number of younger girls have come to me and mentioned, “You do not know how a lot it is meant to me to have you ever there as a task mannequin.” I believe for ladies in management roles, we regularly do not understand simply by being there at a senior place, we give youthful girls hope and inspiration to intention excessive.

Stephanie Soong: Talking of robust girls and superior girls, I need to give a shout-out to my colleague, Nana Ama Sarfo, who wrote a very nice piece on you if you first grew to become CTPA director. You mentioned throughout that profile that your precedence was finalizing pillar 1 and pillar 2. And also you talked about this a bit briefly earlier. Is there something you possibly can inform us at this stage? Do you are feeling like that objective has been fulfilled? And may you replace us with something new?

Grace Perez-Navarro: Sure. Nicely, I can say a number of issues. One, on pillar 2, I believe we’re all very happy at CTPA that we’ve got delivered the worldwide minimal tax. Clearly, there may be extra steering that can be popping out. We’re actually ramping up our capability constructing. As a result of so many nations, particularly growing nations, need to implement the minimal tax, and we need to be certain they can do it and to do it in a constant method in order that afterward after we do peer opinions, we do not have to return and have them do extra laws. That has been an incredible success.

If you consider once I first began on the OECD, I arrived in the course of 1997, and the dangerous tax competitors venture was underway and being finalized. Again then, you can not have talked about establishing a worldwide minimal tax.

As a lot as nations have been involved about tax competitors, they weren’t in a position to agree then. They did not even discuss a minimal tax. One was speaking about, “Nicely, simply zero tax in itself ought to be thought-about a dangerous tax apply.” However clearly, with just one nation supporting that view, that didn’t win the day. And now we do have a minimal tax that’s placing a flooring on tax competitors to assist all nations defend their tax bases. So I believe that could be a main achievement.

We’re making good progress on the opposite a part of pillar 2, the subject-to-tax rule, which within the grander scheme of issues is just not enormous, besides it is rather necessary for growing nations which will have negotiated treaties that didn’t find yourself being so favorable to them. It is a approach to assist growing nations defend their tax base. So, that we hope to finalize quickly.

Then on pillar 1, we’ve got the multilateral conference. We’ve got been making progress. You could have seen all of the totally different public session paperwork we have put out. We’re heading in direction of the end line. We’re speculated to finalize it by the center of the yr. We’re making progress. There’s nonetheless some powerful points to resolve, however I believe there’s a actual willpower and goodwill within the inclusive framework to attempt to get there.

On quantity B, individuals usually neglect concerning the simplification of switch pricing. We’re lastly making actually good progress on that. I believe if we nail that, that can be a serious, main achievement. Not just for tax administrations which are challenged in administering the switch pricing guidelines, which as you recognize, it is info and circumstances. It’s a must to have a look at this with each case. For growing nations, they usually haven’t got comparables, and so they have restricted assets. So it is an actual problem.

If we are able to take a giant chunk of those pretty routine circumstances off the desk with simplification, that can be a profit for all, and enterprise may be very supportive. So I believe it is a win-win, and it seems like we’ll be capable to get there.

I might say it is a disgrace it is not all accomplished. I might’ve favored that. We’re not there but, however I believe we’re getting shut. And I believe the query can be, can we nail down these tough points? Are nations prepared to make compromises?

Stephanie Soong: Launching off that a bit bit, how do you suppose the position of the OECD will evolve as a tax requirements setter for worldwide tax sooner or later, after you’ve got left?

Grace Perez-Navarro: Nicely, I believe it is already developed fairly a bit. I believe it’s going to simply proceed alongside the identical path, which is to work with a wider group of nations to develop requirements. After which the opposite necessary half that we added was the capability constructing and help afterwards.

When you return to once I first arrived on the OECD, we might simply set requirements. Whereas we did do some session of different nations, mainly the requirements have been being set by OECD nations. After which everybody was just about left to their very own units to implement. And so, even if you happen to had an attractive commonplace, it would get applied in numerous methods.

We see that taking place, and enterprise all the time complains about that — that we’ve got set an ordinary, however then nations aren’t making use of it persistently. And so we have accomplished, I believe, an excellent job through the years of not solely supporting nations in implementation. But in addition the peer evaluate course of, I believe, is absolutely necessary to verify there may be consistency and no form of slipping backwards and never implementing the requirements within the acceptable approach.

I believe we’ll simply proceed on that path. You possibly can already see within the Inclusive Discussion board on Carbon Mitigation we’re not even attempting to set requirements. What we’re attempting to do is collect information from all of the nations about what pricing and non-pricing measures they’re taking, after which mapping these to the emissions they’re attempting to focus on within the totally different sectors and having a dialogue, permitting nations to speak about what works properly, what might assist them.

As a result of as you mentioned, the targets that every nation has set for itself is not going to be met with the measures that they are presently taking. So extra must be accomplished. And the query is, what extra may be accomplished? Each from a political perspective, which carbon taxes are simply not one thing that many nations can implement. What different alternate options can be utilized to try this?

I believe this information dialogue and, on this case, finally resulting in decarbonization, my three D’s, is an efficient mannequin going ahead. However I believe what we’ve got accomplished already by way of evolving in how we feature out our work is we’re simply placing a lot, rather more emphasis on facilitating implementation and making certain that it is constant.

Stephanie Soong: How do you suppose the position of the OECD CTPA director will change after you depart?

Grace Perez-Navarro: Nicely, I believe for one factor now, I’m being changed as deputy with two deputies. I’ve already spoken to Manal about that. She wants to consider how she desires to divide up that position after which what her position is in that complete combine. However apart from that, I do not know that it’ll change that a lot, as a result of the areas of labor that we’re doing will stay largely the identical.

We now just about cowl all of tax, home and worldwide. The one factor we do not actually cowl is customs, as a result of you could have the World Customs Group coping with that. However so I suppose the position itself could not change that a lot. Maybe the areas of emphasis will change.

Stephanie Soong: Nicely, I look ahead to overlaying no matter comes out subsequent.

What are you most happy with throughout your time on the OECD?

Grace Perez-Navarro: Nicely, I do suppose the elimination of financial institution secrecy was a serious achievement. As I mentioned, I actually suppose that that might not have been accomplished and not using a world effort, and with out the political help that we had from the G-20. That is one thing I began engaged on once I first arrived, was engaged on financial institution secrecy. We put out a report, which you most likely have by no means seen, known as “Bettering Entry to Financial institution Info for Tax Functions.” It was so controversial then that we could not name it the “Financial institution Secrecy Report.” A few of our secretive nations insisted we could get this very factual title.

We knew what needed to be accomplished, however we simply did not have the political weight. And I believe one of many issues that the monetary disaster taught us was how necessary getting political backing for main adjustments in tax coverage is required. As a result of we had accomplished the work on the technical stage, however technical individuals can solely go to this point. To have that sort of basic change in coverage and attempt to push that in nations the place their complete enterprise mannequin relied on it, you wanted that political help.

I assume the opposite factor that I might add to issues I am happy with is the work we hope can be accomplished quickly on reforming Brazil’s switch pricing. I believe from the day I arrived, and even earlier than once I labored on the Chief Counsel’s Workplace, one of many issues I labored on was the U.S.-Brazil tax treaty, which as you recognize, doesn’t exist. I labored on the negotiations, and a giant a part of the problem was that Brazil’s tax coverage within the worldwide space was simply so totally different from the remainder of the world.

Having spent the final 5 years working with Brazil to assist them transfer to the OECD commonplace, not for the sake of shifting, however as a result of they see now that they’re dropping income with their present system, that a variety of multinationals will not be paying tax in Brazil for worth that has been created in Brazil, I believe it is going to be a serious achievement to have taken a rustic from such a unique place to the worldwide commonplace.

Stephanie Soong: Yeah. That can be enormous, yeah. I am wanting ahead to seeing that too. What do you suppose you can have accomplished higher? What do you want you can have completed you did not get to?

Grace Perez-Navarro: Nicely, I assume on the substantive facet, one of many issues that I actually want we had been in a position to spend extra time on is wanting on the intersection of tax commerce and funding insurance policies. And bringing all these issues collectively as a result of I do suppose — and we’re seeing it now greater than ever, with the minimal tax and what that’s doing to tax incentives and what that may imply for the subsidy area. I actually suppose it might’ve been good to work on that. However we simply had so many huge different tasks; it was exhausting.

Stephanie Soong: You have been a bit busy with issues.

Grace Perez-Navarro: However I do suppose that’s an space that’s undoubtedly price exploring. On the form of broader areas of CTPA, not substantive, however I want I might’ve been in a position to spend extra time growing workers and actually serving to them attain their full potential. I did do fairly a little bit of that, however it’s actually necessary in a global group the place you could have individuals coming from totally different cultures, totally different work cultures, totally different languages, totally different tax methods. I believe extra help is required than within the bizarre office. However regardless of these issues, I believe we’ve got been in a position to accomplish an incredible quantity.

I’ll say that one indication of the truth that we’ve got been doing fairly properly is that each one via the pandemic, we have been listening to from different organizations and different components of OECD, how individuals have been affected by melancholy, isolation. And we did not actually have that in CTPA, as a result of everybody was so centered on delivering the pillars that there was an incredible sense of objective. I believe that helped hold the group collectively, and we’ve got a very nice group spirit in engaged on all of those difficult, thrilling points.

Stephanie Soong: I assume that may reply my subsequent query then. What’s going to you miss most concerning the job?

Grace Perez-Navarro: Oh, properly, I’ll miss the policymaking. It’s difficult, and there have been many difficult moments during the last 25 years. However I do miss that. I imply, there’s nowhere else the place you possibly can have this sort of influence on world tax coverage. In order that has been very thrilling.

I’ll miss the individuals, all of the delegates and the workers. Hopefully I will see them nonetheless after I depart. However no, that has been simply actually nice. Attending to know individuals from around the globe and dealing with them to enhance their tax methods, to enhance the general worldwide structure. So I believe I’ll miss all of that.

Stephanie Soong: What will not you miss?

Grace Perez-Navarro: Oh, I will not miss working 24/7. It has been actually intense. I do not suppose individuals understand how a lot all of us work. I will not miss the rising forms that we discover in all places. However no, general, it is simply been a beautiful expertise on the OECD. I really feel very lucky that I someway magically ended up there.

Stephanie Soong: So the massive query then is what’s going to you do subsequent? That was one query that you just didn’t reply in that profile.

Grace Perez-Navarro: All proper. Nicely, I nonetheless do not know that I will reply it in full. However I’ll take a while off. I’m going to spend two weeks in Italy having fun with the very southern a part of Italy. Then afterwards I’ll do tasks of curiosity. I’m not in search of a full-time job.

I am not truly in search of something, however I’ve been approached with a variety of totally different actually attention-grabbing alternatives that can be time restricted. So I can be doing various things. In order that’s it. I will simply do some attention-grabbing tasks right here and there and revel in life.

Stephanie Soong: That appears like an excellent plan. And I look ahead to listening to extra when the time comes, what you will be doing subsequent. Will you continue to be in tax you suppose? Will you be like Pascal and hold a foot in tax?

Grace Perez-Navarro: Sure, undoubtedly. I imply, many of the attention-grabbing alternatives that I’ve been offered are associated to tax. However I want to do one thing past tax, so you will have to remain tuned for that.

Stephanie Soong: OK. OK. Nicely, thanks a lot once more, and I need to do one thing actually enjoyable, if you happen to do not thoughts.

Grace Perez-Navarro: OK.

Stephanie Soong: Are you aware the Contained in the Actor Studio, that TV present with James Lipton. He is just like the director of the New York College’s Tish College of the Arts? He’d interview celebrities and ask them a questionnaire.

Grace Perez-Navarro: OK.

Stephanie Soong: Actually brief, actually enjoyable. OK, so what’s your favourite phrase?

Grace Perez-Navarro: Favourite phrase? Oh, sure.

Stephanie Soong: What’s your least favourite phrase?

Grace Perez-Navarro: No.

Stephanie Soong: What turns you on?

Grace Perez-Navarro: Enjoyable within the solar with associates.

Stephanie Soong: What turns you off?

Grace Perez-Navarro: Boastful individuals.

Stephanie Soong: What sound or noise do you’re keen on?

Grace Perez-Navarro: Oh, the sound of the ocean.

Stephanie Soong: What sound or noise do you hate?

Grace Perez-Navarro: Complaining.

Stephanie Soong: What career, apart from your personal, would you want to aim?

Grace Perez-Navarro: Realistically or in my fantasy world? Architect.

Stephanie Soong: What career would you not love to do?

Grace Perez-Navarro: Nicely, I assume choose up the trash, given the state of affairs in Paris.

Stephanie Soong: Is there a strike?

Grace Perez-Navarro: An enormous strike. Trash piling up in all places.

Stephanie Soong: Oh. Oof. OK. If heaven exists, what would you want to listen to God say if you arrive on the pearly gates?

Grace Perez-Navarro: Oh, “so glad you lastly made it.”

Stephanie Soong: Nicely, we’re very glad you lastly made it right here to the workplace. Thanks a lot for sitting with me and answering all my questions. And we’ll really miss you if you’re gone. However we’ll keep in contact, and we’re wanting ahead to seeing what you are doing subsequent.

Grace Perez-Navarro: Thanks a lot, Stephanie.