On September 16, 2014, the OECD released its first recommendations as part of the Base Erosion and Profit Shifting Project (“BEPS”), covering the following topics:
- Addressing the tax challenges of the digital economy;
- Ensuring the coherence of corporate income taxation at the international level, through new model tax and treaty provisions to neutralize hybrid mismatch arrangements;
- Realigning taxation and relevant substance to restore the intended benefits of international standards and to prevent the abuse of tax treaties;
- Assuring that transfer pricing outcomes are in line with value creation, through actions to address transfer pricing issues in the key area of intangibles;
- Improving transparency for tax administrations and increase certainty and predictability for taxpayers through improved transfer pricing documentation and a template for country-by-country reporting; and
- Facilitating swift implementation of the BEPS actions through a report on the feasibility of developing a multilateral instrument to amend bilateral tax treaties.
These represent 7 of the 15 key areas identified in the BEPS action plan endorsed by the G20 in July of 2013. The remaining 8 areas are to be addressed in 2015.