Saturday, February 10, 2018
The Inclusive Framework on BEPS has released additional guidance to give certainty to tax administrations and MNE Groups alike on the implementation of Country-by-Country (CbC) reporting (BEPS Action 13). The Inclusive Framework also approved updates to the results for preferential regime reviews conducted by the Forum on Harmful Tax Practices (FHTP) in connection with BEPS Action 5.
Further guidance on Country-by-Country reporting
The additional guidance addresses two specific issues: the definition of total consolidated group revenue and whether non-compliance with the confidentiality, appropriate use and consistency conditions constitutes systemic failure. The complete set of guidance related to CbC reporting issued so far is presented in the document released today. Also released today is a compilation of the approaches adopted by member jurisdictions of the Inclusive Framework with respect to issues where the guidance allows for alternative approaches. These documents will continue to be updated with any further guidance that may be agreed.
Updated conclusions on preferential tax regimes
Members of the Inclusive Framework are continuing to make progress in delivering the international standard on BEPS Action 5. Two Barbados' regimes, the International financial services and the Credit for foreign currency earnings/Credit for overseas projects or services, were concluded as "potentially harmful" by the Inclusive Framework in the 2017 Progress Report on Preferential Regimes. In a ministerial letter Barbados committed to amend these regimes within the FHTP's agreed timelines and in accordance with the criteria of the FHTP. The Inclusive Framework therefore agreed to update the conclusions for these two regimes to "in the process of being amended".
Canada's regime for international banking centres (IBCs) was determined to be "potentially but not actually harmful" by the FHTP in the 2004 Progress Report. Canada has abolished the IBC regime, with limited grandfathering which is consistent with the FHTP guidance and therefore the conclusion for this regime is updated to "abolished".
An updated table of regime results is now available. The OECD will continue to communicate updated results of reviews of preferential regimes as approved by the Inclusive Framework.