David D. Stewart: Welcome to the podcast. I'm David Stewart, editor in chief of Tax Notes Today International. This week: women in tax leadership.

On March 1, the OECD announced that Marlene Nembhard Parker would co-chair the BEPS inclusive framework. In this newly created role, she would be joining Fabrizia Lapecorella, who had taken on the leadership of the group just two months prior.

Joining me now is Tax Notes Chief Correspondent Stephanie Soong Johnston, who recently caught up with the co-chairs to talk about their new roles. Stephanie, welcome back to the podcast.

Stephanie Soong Johnston: Thanks. Good to be here as always.

David D. Stewart: All right. To begin with, could you give listeners some background on the two new co-chairs and what led to the appointment of an additional position?

Stephanie Soong Johnston: Sure. I spoke with Fabrizia Lapecorella, who is director general of finance at the Italian Ministry of Economy and Finance. And Marlene Nembhard Parker, who's chief council for legislation, treaties and international tax matters at Tax Administration Jamaica.

As you mentioned, Lapecorella took over as chair of the inclusive framework on BEPS on January 1. Nembhard Parker was announced as co-chair of the group on March 1, which just happened to be the first day of Women's History Month. So I thought it would be timely to get them both on the podcast.

As you mentioned, this is the first time the inclusive framework has elected two people to lead the group. And if you recall my previous appearance on the podcast, the inclusive framework is a group of 141 OECD and non-OECD jurisdictions that was set up in 2016.

And it's committed to implementing BEPS project measures and is setting additional standards to curb corporate tax avoidance. And it's leading the work on implementing the two-pillar global corporate tax reform plan that you've heard me talking a million times about so much on this podcast.

This group is technically an enlargement of the OECD's Committee on Fiscal Affairs, or CFA, which is the OECD's primary standard setting body for tax issues. So the chair of the CFA has always been the chair of the inclusive framework. And Lapecorella herself, has been deeply involved in the CFA Bureau since 2012, and was elected to replace Martin Kreienbaum, who is the director of International Taxation of the German Ministry of Finance. It's notable that she is the second woman and the second Italian chair since the CFA's founding in 1971.

Nembhard Parker has also been a long time participant in the international negotiations on the world stage, and particularly through the U.N. Committee of Experts on International Corporation Tax Matters. She's also co-chair of the CFA's Advisory Group for Global Dialogue on Tax Matters and is a former member of the inclusive framework Steering Group. Now, the co-chair position was created after the OECD sent a report to the G-20 finance ministers in October 2021. That report took stock of developing countries' progress in the inclusive framework, and recommended that the group's governance structure should represent developing countries better. So this co-chair position was a natural fit.

David D. Stewart: All right. Could you give us a preview of what you talked about?

Stephanie Soong Johnston: Sure. We talked about a lot of things. The new co-chair format, how it's working so far, and what they hope to accomplish with it. I got the sense that because this new format was so new that they were still sort of figuring things out. But it sounded like they were getting along really well and they had been friends before. So, it seemed like this co-chair arrangement was going to be successful in their view.

We also talked about the significance of two women leading the inclusive framework, their experiences working in tax, and advice for women who want to lead in international tax. It was a very interesting conversation.

Lapecorella called in from Italy and Nembhard Parker called in from Jamaica, and I was grateful that they were both able to speak with me at the same time, given their busy schedules.

David D. Stewart: All right, let's go to that interview.

Stephanie Soong Johnston: Well, thank you both, Marlene and Fabrizia, for your time today and sitting down with me to speak about the inclusive framework and the new co-chair structure of the framework.

It is Women's History Month and I think it's pretty awesome that there are two very strong women in tax, leading the work, very important work that the OECD is doing in the international sphere. I just wanted to get a sense of how you first got involved with the inclusive framework and how do you balance this work with your day job?

Marlene Nembhard Parker: OK. Thank you, Stephanie. And thank you very much for inviting me to spend this time along with my co-chair, Fabrizia, in a different setting. A more relaxed setting, I guess we could say, because it's always work.

Well, I became involved in the inclusive framework in 2016 as a consequence of being the person at Tax Administration Jamaica in charge of legislation and international tax matters. And so, it was a part of my job to lead the work of the BEPS measures and the introduction of them into Jamaica.

And so, Jamaica became the 85th member of the inclusive framework in 2016. And so I, along with my co-delegate, Bevon Sinclair, became the leaders on the work for Jamaica. In international matters, we usually have a technical as well as a legal person in the international forum. So that was my involvement.

In terms of balancing, I think it's important to have a supportive tax administration and government behind you. And so, it is a part of your work, the fact that you have their backing as well as their confidence is very helpful, and they allow for the time for you to do both. So that has been my experience.

Stephanie Soong Johnston: And Fabrizia how about you?

Fabrizia Lapecorella: Well, in some senses my story is very similar to Marlene's story.

In the sense that I was involved in the exclusive framework as at the beginning when it was established by the OECD and the G-20 in Kyoto in 2016. At the time, I was the head of delegation, but since 2012, I was member of the Bureau of the Committee for Fiscal Affairs. So that when the inclusive framework was established in Kyoto, I became a member of the Steering Group of the Inclusive Framework [on BEPS] right from the beginning of this thing.

And well, as to the dealing with the work that is carried out in that very demanding forum and our own domestic work, that is it's always been certainly challenging, but it has become — and Marlene I think you can say that I'm not exaggerating — it has become really, really challenging these days.

So, it was always, certainly, it's always been demanding, now it's extremely challenging. Because the amount of work, the complexity of the technical work, the frequency, the very high frequency of the meetings that are called on a weekly basis. And sometimes more than one time per week, it's really complex not to be— But I mean, we are all aware that we, I mean, first of all, we have to respond to a political commitment taken by our ministries and we are all aware that we are doing some, so to speak, some sort exceptional work there. So, we try to do our best.

Stephanie Soong Johnston: So, I know that the inclusive framework chairship is now co-chairs. There's one co-chair from developed countries and one from a developing country. And that was a key recommendation in a report to the G-20 finance ministers, a way to improve the inclusive frameworks so that developing countries can better benefit from it.

And briefly, how is this co-chairship working in practice? And what do you hope that this new arrangement will accomplish?

Fabrizia Lapecorella: Thanks, Stephanie. Well, let me say that I just started. I was appointed last year, but I started in this role as of January this year. And at the end of last year, I was invited by the finance minister of Jamaica, in fact, to take part to a very interesting high level conference with a number of very committed ministers from developing countries, the brass of the tax officials. And I was invited to, in a sense, to report back at that conference, what we — I wasn't invited as the chair of the CFA or the inclusive framework — I was invited as the Italian representative of the tax administration. So, as representing the Italian G-20 presence, I was asked to report back in that context, what was the main accomplishment for the stream of work of the G-20 on tax and development, which I did.

After that conference, the Jamaican ministers actually circulated a very interesting brief, a very interesting report on the meetings, making very clear what were the expectation of developing countries as a follow-up to the Italian G-20. And against that background, when I started, I actually discussed with the Secretariat, the OECD Secretariat the right way to propose to colleagues, to start with the establishment of co-chair appointed by the other members, that selecting a colleague from a known OECD, a known G-20 country.

So we launched the procedure and Marlene was elected by all our colleagues. And for me, it was particularly fortunate. We've been knowing each other for long.

We've been together all the time. When sitting at the Steering Group, we've always been sitting together. It is "I" for Italy and "J" for Jamaica. And this also is an element that helps, the fact that we know each other very well, and we can rely on each other to do this job.

I think this is more than a signal to developing countries and on the real willingness of making the process, of making inclusive process, that is so challenging for most of them. And this is it, I think. I mean, what we expected to achieve from that is we expect by sharing the responsibility of touring this extremely large forum, and I think we expect to be able to reflect as closely as possible, as well as possible, the needs of the very diverse countries and jurisdiction that are sitting out as well.

Stephanie Soong Johnston: It actually warms my heart that you both are already friends, and now you're co-leading this very large job. So, I love that you both already have established working relationship and also get along really well. So, that's really nice to hear it.

Marlene, would you like to weigh in?

Marlene Nembhard Parker: I will. I want to support a lot of what Fabrizia just said, Stephanie. The statement of outcomes of that meeting settled some of the challenges that are well known that developing countries have had with the governance process of the inclusive framework: the complexity of the measures, the voice sometimes that developing countries feel that have not been heard. And so, it was important.

And it's interesting that it was under the presidency of Italy, of the G-20, that this focus on the needs of developing countries be met. That gave rise to the subsequent discussions.

And so, I think the intention is for us to work together to ensure that the entire constituency of the inclusive framework, that they see the benefit of the inclusive framework. And I think we also have to realize that we are all on a kind of learning curve.

As Fabrizia said, it's much more complex, much more challenging to tackle the issues that we are now dealing with in the inclusive framework. And developing countries who are at different capacities have in some instances been left behind in terms of the pace at which the work is going.

And so, I think we, with the Secretariat, will have to work closely about how we address that gap. So that the members of the inclusive framework, some are not left behind while others are moving ahead, because of their capacity issues and other concerns that they have. So it is, as she said, a lot more challenging.

But as she said, we have sat together for many years beside each other and we are reflecting and I said, "Boy, those days." We now look back on those days, Fabrizia, and think that it was a fun time. I mean, it was hard work, but our conversations were light. We talked about all kinds— And now, we just have to be so laser focused on what is happening. It's a different environment and different in many ways. People are looking at the post-COVID response, how their countries are going to be built, how does this global tax deal fit into that and so on. And so there are a lot more things, a lot weightier issues to consider.

Stephanie Soong Johnston: Absolutely. And so, maybe just switch— shifting in focus a little bit. As far as— It is Women's History Month as you are aware. How significant is it to you that now two women are leading this inclusive framework? And what does it mean to you?

Marlene Nembhard Parker: Well, I believe that the capacity of women to lead in any situation is settled. I think in addition to the technical expertise, we do bring a kind of instinct, I think, for what is unsaid. So, we are able, I think, instinctively to kind of sift through and to have that inner voice or that additional ability to hear what is unsaid and what needs to be said to provide clarity.

So I think that we bring that, I think we also bring— We are natural consensus builders, and I think that given the current situation that we are in, I think that women bring that additional ability as well.

I think the real question though, Stephanie, is whether we are the right persons who should be leading the inclusive framework at this time. I think the fact that we are women is good, but what do we bring to the table with our technical expertise?

And I think the fact that we are both here is a testimony to the confidence that has been placed in us by our colleagues. And I think I can speak on behalf of Fabrizia when I say, I think we feel honored and privileged that we have been given the opportunity to lead at a time like this. Where we are in a pandemic still, economies have been devastated, particularly developing countries. There's climate change, there are supply chain issues. Now there's a war and SDGs (Sustainable Development Goals), and domestic resource mobilization, and all of these issues swirling around.

And so, where does tax, where does global tax fit into all of that? How can it be a solution, certainly to the issues of domestic resource mobilization, building that company— Countries, sorry. And we have to lead that effort from the global tax perspective.

And so challenging, yes. But I also believe that it creates a real opportunity for multi-naturalism, to provide a solution. And so, the solution of digitalization has its many issues, as we are aware, but I think that our work will probably have to go beyond just digitalization. Because there are other issues that developing countries in particular are concerned about, and they have been the ones that have been most impacted by the pandemic.

And so, I think it presents a real opportunity for us to be able to work together and to work with the OECD Secretariat, and our colleagues on the Steering Group of the Inclusive Framework itself, as well as other stakeholders who are observers to the OECD.

Stephanie Soong Johnston: Fabrizia, how about you?

Fabrizia Lapecorella: Well, very quickly, Marlene said very interesting and important things. Maybe I should add simply that what we are doing is, we're just starting.

The reality of a process, of a unique extraordinary process where developed economies, emerging economies, and developing countries are sitting around the same table to write down rules.

So far, I mean, last year, what we have achieved was an extraordinary outcome, historic outcome, as was defined by many people. The historic outcome of achieving a political agreement on substantive rules that change completely the international tax architecture. Now we are getting to the even more difficult phase of writing down the legislation, the rules. So, this means it's even more difficult than the political agreement on the principles of the new.

So, this is the reality of the extraordinary evolution, standard setting at a table with 141 countries and jurisdictions. The process requires every kind of soft skills. And to be honest, I think that women are, much really I would say, endowed with soft skill of much higher quality than men are.

Stephanie Soong Johnston: So, can you speak to your experiences working in leadership roles in tax? What were the challenges and advantages that you've faced, and what is the future of women in international tax leadership?

Fabrizia Lapecorella: Well, it is certainly a world that has been traditionally for years the domain of men. But slowly women are gaining space and also significant space.

I don't know about Marlene, but I mean, in my division, in my year at the Ministry of Economy and Finance in Italy, we are step by step rebalancing the gender gap at the level of the ministry and in the department. In my department, I would say a fact, if I see the executives— I mean, there are a number of women that are proving more and more essential to the performance of the whole department. I think it is not an easy area, but at the international level, I think we are encouraging something.

At the end, now in the inclusive framework, I think definitely half of the head of delegation is female. In the Steering Group we have a third of delegates that are female. And if I look back, you can see that very important step forwards have been made with input of women in tax.

And for instance, the whole the BEPS project, that is what then led to the establishment of inclusive framework, was similarly started by a woman colleague of mine. I mean, it was Manal Corwin at the U.S. Treasury who started, who forced the brainstorming on the issue of international tax avoidance in the context of a globalized economy. So I mean, it is happening, but it will take time.

Stephanie Soong Johnston: Sounds great. Marlene, what advice would you give for women who aspire to become leaders of the global tax stage?

Marlene Nembhard Parker: Well, I think one of the first things you have to ensure is that you have the backing of your tax authority, you have the backing of your country. And I'm speaking now specifically for women who are coming from a public sector background, working in tax administration. And perhaps my advice is more applicable to developing countries in particular, because that has been my experience. And so, I'm going to speak from my own experience and what helped.

I had a very strong support. I've maintained a very strong support from my government, from my tax authority. I have a very supportive staff that I also supervise. And so, I think that support is important. The confidence that they place in you, I think that is important to allow you to participate and allow you to grow in this field.

I think as well, that it's important to build relationship with your colleagues in the global sphere. So, whether it's global forum inclusive framework, other stakeholders. It's important for you to build a relationship, a network of experts in the field who can provide mentorship.

Mentorship has been very, very important, I think in my own development, both at tax administration as well as—There are a few persons that have become my mentors, and people that I speak to through the U.N. through just on the global tax landscape circuit that I have gained a lot from. And it helps fulfill your knowledge gap as well. So mentorship, I think is important.

I think being open to the rich and diverse views of your colleagues, to realize that they are under the same kind of pressure that you may be under. And so, even when there is passionate debate going on, say between developed and developing countries, coming with different perspectives, it's important to listen to what your colleagues are saying, and to understand where they are coming from.

Because people are very passionate about tax, and so it can come across as if it's personal. It is not. They are passionate about their work as you are. And I think it's important to listen to what the other person is saying. And to listen with a view to understanding and not just to reply. I think that is also important.

I think as well, developing an awareness that international tax requires an understanding of global geopolitical dynamics, I think is important. There has to be a sensitivity to cultural dynamics as well, and also a sensitivity to the concerns of taxpayers. The taxpayers that we are now dealing within BEPS are particularly multinational enterprises, and I think that it's important to understand their own concerns. The issue of certainty is one of the building blocks, for example, of pillar 1 and a predictable environment. So, I think it's important to understand what those concerns are so that our responses can be informed.

I think reading extensively is also very helpful. If you are in the position to do some writing blogs and share your opinion, if that is allowed, I think that's important.

And I think finally, I would advise women to share your knowledge with others, mentor somebody else. I think we are seeing a growth now, particularly in the U.N. Committee where I also sit, of younger women who are bright, who are dynamic and who have a voice. And it really is a joy for me to watch, to see younger women coming in this space and sharing their knowledge, sharing their ideas. And I think it really makes— It's good for the future, I think of global tax. And so, it's important to mentor somebody else, expose them to what you are learning and so on. And I think that's really helpful.

Stephanie Soong Johnston: I just want to thank you both for your time today, and I wish you all the best for the next steps. It's a really exciting time to be in international tax and in covering the inclusive framework. So, thank you again for your time.

Marlene Nembhard Parker: Thank you, Stephanie.

Fabrizia Lapecorella: Thank you Stephanie, for your patience. Ciao, ciao, bye.

David D. Stewart: And now coming attractions. Each week we highlight new and interesting commentary in our magazines. Joining me now is Acquisitions and Engagement Editor in Chief Paige Jones. Paige, what will you have for us?

Paige Jones: Thanks, Dave. In Tax Notes Federal, Christopher McLoon illustrates how partners face significantly different tax outcomes, depending on how reimbursement transfers are allocated among preformation capital expenditures. Kyle Pomerleau, examines inflation's impact on the taxation of capital income. In Tax Notes State, four Eversheds Sutherland practitioners looked at Texas's recently amended rules concerning the state's research and development credit. Three KPMG practitioners write that states will soon look to collect taxes on NFT sales. In Tax Notes International, Marie-France Dompierre provides an overview of Canada's tax treatment of non-resident professional athletes. Jinyan Li argues that the pillar 2 under tax payments rule departs from international consensus and tax treaties. In Featured Analysis, Ryan Finley argues that logic behind the final foreign tax credit regulations attribution requirement conditions concerning foreign jurisdictions transfer pricing rules is more difficult to follow. And finally, on the Opinions page, Robert Goulder argues that the OECD-driven rollback of foreign digital services taxes should be proportional to participation in the pillar 1 reforms.

David D. Stewart: That's it for this week. You can follow me online @TaxStew, that's S-T-E-W, and be sure to follow at @taxnotes for all things tax. If you have any comments, questions or suggestions for our future episode, you can email us at podcast@taxanalyst.org. And as always, if you like what we're doing here, please leave a rating or review wherever you download this podcast. We'll be back next week with another episode of Tax Notes Talk.

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