On 5 October 2015, the Organisation for Economic Co-operation and Development (OECD) published its final documents in its Base Erosion and Profit Shifting (BEPS) project. This marked the culmination of a process that commenced in July 2013 with the publication of the BEPS Action Plan.

The October 2015 publications cover all 15 of the BEPS Actions and proves wrong those who doubted that the OECD could meet its ambitious timetable. However, there is still much work  to be done as the recommendations contained in the various OECD documents now need to  be implemented domestically. The extent to which this takes place will ultimately determine the lasting impact of the BEPS project.

As far as domestic implementation is concerned, it is worth bearing in mind that:

  • some of the BEPS Actions may prove easier to implement/more popular than others
  • it is highly likely that even where a BEPS Action is widely implemented, there will be differences in the way in which each jurisdiction chooses to do so
  • it is conceivable that some jurisdictions may use non-implementation by others as a reason for their own non-implementation, for fear of putting themselves at a competitive disadvantage.

UK implementation of BEPS

The UK has, of course, already signalled its intention to implement BEPS Action 2 (hybrid mismatches) in the form of draft Finance Bill 2016 legislation (see above).

On 5 October 2015, HMRC published draft regulations to implement BEPS Action 13 (country- by-country tax reporting). See here.

On 22 October 2015, HMRC published its proposals for modifying the UK “patent box” regime. These proposals implement BEPS Action 5 (countering harmful tax practices). See here.

Also, on 14 December 2015, the UK Treasury and HMRC hosted an event on the implementation of BEPS Action 4 (interest deductibility). The Treasury subsequently published a note and slides regarding the event. See here.

We’ll cover these proposals in more detail, and any further BEPS developments as they arise, at a later date.

The final BEPS documents can be found here.