On 5 October 2015 the Organisation for Economic Cooperation and Development (“OECD”) released the final Base Erosion and Profit Shifting (“BEPS”) reports covering the 15 actions of the BEPS action plan of July 2013. The stated aim of the BEPS action plan is to realign taxation with economic activities and value creation and to create a single set of international tax rules to address BEPS issues.
The final package of BEPS measures includes new minimum standards on country-by-country reporting, which should give tax administrators a global picture of the operations of multinational enterprises; treaty shopping, to attempt to put an end to the use of conduit companies to channel investments; curbing harmful tax practices, in particular in the area of IP and through automatic exchange of tax rulings; and effective mutual agreement procedures.
Please click here for a link to each of the 13 reports that have been released. They are as follows:
Action 1: Addressing the Tax Challenges of the Digital Economy
Action 2: Neutralizing the Effects of Hybrid Mismatch Arrangements
Action 3: Designing Effective Controlled Foreign Company Rules
Action 4: Limiting Base Erosion Involving Interest Deductions and Other Financial Payments
Action 5: Countering Harmful Tax Practices More Effectively, Taking into Account Transparency and Substance
Action 6: Preventing the Granting of Treaty Benefits in Inappropriate Circumstances
Action 7: Preventing the Artificial Avoidance of Permanent Establishment Status
Actions 8-10: Guidance on Transfer Pricing Aspects of Intangibles
Action 11: Measuring and Monitoring BEPS
Action 12: Mandatory Disclosure Rules
Action 13: Guidance on Transfer Pricing Documentation and Country-by-Country Reporting
Action 14: Making Dispute Resolution Mechanisms More Effective
Action 15: Developing a Multilateral Instrument to Modify Bilateral Tax Treaties
The news conference and technical presentation for the launch of the final BEPS package are available to the public and may be accessed by clicking the above links.
Implementation of the reports will be through a combination of amendments to double tax treaties and/or domestic legislation. The OECD and G20 have agreed to cooperate in areas that require further work in 2016 and 2017.
It is likely that Minister Noonan will announce details of the new knowledge development box and country-by-country reporting in his Budget 2016 speech on Tuesday 13 October 2015.