THE OECDS REPORT ON HARMFUL TAX COMPETITION

In response to pressures created by the increasing globalization of th e world economy, the OECD has issued a report titled ''Harmful Tax Com petition: An Emerging Global Issue'' that provides an analysis of the phenomenon known as harmful tax competition. The Report identifies fac tors that characterize tax havens and harmful preferential tax regimes and recommends numerous measures in the areas of domestic legislation , tax treaties, and international cooperation, that countries may purs ue to counter harmful tax competition. As part of intensifying interna tional cooperation, the Report recommends that Member countries adopt a set of Guidelines endorsing the ''3 R's:'' to refrain, to review, an d to remove. By adopting the Report, Members are agreeing to undertake a political commitment to refrain from adopting new measures or stren gthening existing measures, to review existing measures that constitut e harmful tax practices, and to remove harmful features of preferentia l tax regimes within a five-year period. In addition, the Report estab lishes a new international body, the Forum on Harmful Tax Practices, t o implement the measures outlined in the Report.