Oil and Gas

Tracking Alcohol and Oil Production

The 2017 ITIC study on the development of modern revenue controls on alcoholic beverages concluded that, although there are some advantages to the introduction of these systems, tax stamps and the related checking equipment are a sub-optimal policy choice and should not be considered a stand-alone solution. Instead, the goals of curbing the illicit trade in alcohol and protecting tax revenues require a much wider package of effective monitoring, control, and enforcement measures.

Fiscal markers for hydrocarbon oil products can be very useful in enabling revenue authorities to track the flow of the different products through the supply chain to the retail stage with mobile units carrying out random tests to establish the authentic nature of the product at the retail sales point. These, too, need to be part of a comprehensive anti-illicit trade strategy that should include public awareness and support programmes as well as a national enforcement plan.

The Astana Time recently ran an article reporting on the new system Kazakhstan has launched to track alcohol and oil products: https://astanatimes.com/2018/03/kazakhstan-launches-new-system-to-track-alcohol-oil-product-production-distribution/

ITIC Participates at 83rd API Federal Tax Forum

The 83rd Annual American Petroleum Institute Federal Tax Forum was held in Houston on 24-25 April. Congratulations to Stephen Comstock, API’s Director of Tax and Accounting Policy, his staff, and the entire organization on this terrific accomplishment.  The conference covered a wide range of taxation issues relevant to the industry, including updates on prospects for tax reform in the US, as well as updates on tax litigation, rules and regulations, and the current status of the Internal Revenue Service.

ITIC Senior Advisor Karl Schmalz presented an update on the work of the UN Extractives Tax Subcommittee, summarizing the nine guidance notes that have been approved by the Committee of Experts on Cooperation in International Tax Matters for publication later this year. Mr. Schmalz also discussed work underway at other international finance organizations relevant to the oil and gas industry, and recommended enhanced engagement by the industry with these, and other organizations, to ensure work done and reports/recommendations are fact-based, misconceptions are corrected, and inaccuracies do not go unchallenged.


Karl Schmalz is a Senior Advisor to the International Tax and Investment Center (ITIC) and Former Assistant General Tax Counsel, Exxon Mobil Corporation.

ITIC Comments on Transfer Pricing in the Oil and Gas Industry

ITIC’s Oil and Gas Taxation and Regulatory Dialogue recently submitted comments on The Platform for Collaboration on Tax's "Discussion Draft: A Toolkit for Addressing Difficulties in Accessing Comparables Data for Transfer Pricing Analysis." The toolkit “is designed to assist developing countries in navigating an important area of international tax policy: transfer pricing [… and] specifically addresses the ways developing countries can overcome a lack of data on “comparables,” or the market prices for goods and services transferred between members of multinational corporations.”