International Financial Law Prof Blog

Editor: William Byrnes
Texas A&M University
School of Law

Monday, July 9, 2018

Estonia joins the Multilateral Instrument and the United Kingdom deposits ratification instrument

At the OECD Headquarters in Paris, H.E. Ambassador Alar Streimann, Ambassador Extraordinary and Plenipotentiary of Estonia to the OECD, signed Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (the Multilateral Instrument) in the presence of Masamichi Kono, Deputy Secretary-General of the OECD. Estonia becomes the 82nd jurisdiction to join the MLI. Estonia’s signature follows the signatures by Kazakhstan, Peru and the United Arab Emirates earlier this week.

Also today, the United Kingdom deposited its instrument of ratification for the Multilateral Instrument with the OECD. Joining eight jurisdictions that previously ratified, the United Kingdom demonstrates its strong commitment to prevent the abuse of tax treaties and base erosion and profit shifting (BEPS) by multinational enterprises.

The text of the Convention, the explanatory statement, background information, database, and positions of each signatory are available at http://oe.cd/mli.

July 9, 2018 in BEPS | Permalink | Comments (0)

Wednesday, July 4, 2018

OECD releases BEPS discussion draft on the transfer pricing aspects of financial transactions

Public comments are invited on a discussion draft on financial transactions, which deals with follow-up work in relation to Actions 8-10 ("Assure that transfer pricing outcomes are in line with value creation") of the BEPS Action Plan.

The 2015 report on BEPS Actions 8-10 mandated follow-up work on the transfer pricing aspects of financial transactions. Under that mandate, the discussion draft, which does not yet represent a consensus position of the Committee on Fiscal Affairs or its subsidiary bodies, aims to clarify the application of the principles included in the 2017 edition of the OECD Transfer Pricing Guidelines, in particular, the accurate delineation analysis under Chapter I, to financial transactions. The work also addresses specific issues related to the pricing of financial transactions such as treasury function, intra-group loans, cash pooling, hedging, guarantees and captive insurance.

While comments are invited on any aspect of the discussion draft, the document also identifies a number of issues on which feedback is particularly sought.

Interested parties are invited to send their comments on this discussion draft, and to respond to the specific questions included in the boxes, by 7 September 2018 by e-mail to TransferPricing@oecd.org in Word format (in order to facilitate their distribution to government officials). Comments in excess of ten pages should attach an executive summary limited to two pages. Comments should be addressed to the Tax Treaties, Transfer Pricing and Financial Transactions Division, OECD/CTPA.

Please note that all comments received on this discussion draft will be made publicly available. Comments submitted in the name of a collective “grouping” or “coalition”, or by any person submitting comments on behalf of another person or group of persons, should identify all enterprises or individuals who are members of that collective group, or the person(s) on whose behalf the commentator(s) are acting.

For more information, please Tomas Balco, Head of the Transfer Pricing Unit or the Communications Office at the OECD Centre for Tax Policy and Administration.

July 4, 2018 in BEPS, OECD | Permalink | Comments (0)

Monday, June 25, 2018

OECD releases new guidance on the application of the approach to hard-to-value intangibles and the transactional profit split method under BEPS Actions 8-10

the OECD released two reports containing Guidance for Tax Administrations on the Application of the Approach to Hard-to-Value Intangibles, under BEPS Action 8; and Revised Guidance on the Application of the Transactional Profit Split Method, under BEPS Action 10.

In October 2015, as part of the final BEPS package, the OECD/G20 published the report on Aligning Transfer Pricing Outcomes with Value Creation (OECD, 2015), under BEPS Actions 8-10. The Report contained revised guidance on key areas, such as transfer pricing issues relating to transactions involving intangibles; contractual arrangements, including the contractual allocation of risks and corresponding profits, which are not supported by the activities actually carried out; the level of return to funding provided by a capital-rich MNE group member, where that return does not correspond to the level of activity undertaken by the funding company; and other high-risk areas. The Report also mandated follow-up work to develop:

The new guidance for tax administration on the application of the approach to hard-to-value intangibles (HTVI) is aimed at reaching a common understanding and practice among tax administrations on how to apply adjustments resulting from the application of this approach. This guidance should improve consistency and reduce the risk of economic double taxation by providing the principles that should underlie the application of the HTVI approach. The guidance also includes a number of examples have been included to clarify the application of the HTVI approach in different scenarios and addresses the interaction between the HTVI approach and the access to the mutual agreement procedure under the applicable tax treaty. This guidance has been formally incorporated into the Transfer Pricing Guidelines as an annex to Chapter VI.

This report contains revised guidance on the profit split method, developed as part of Action 10 of the BEPS Action Plan. This guidance has been formally incorporated into the Transfer Pricing Guidelines, replacing the previous text on the transactional profit split method in Chapter II. The revised guidance retains the basic premise that the profit split method should be applied where it is found to be the most appropriate method to the case at hand, but it significantly expands the guidance available to help determine when that may be the case. It also contains more guidance on how to apply the method, as well as numerous examples.


Addressing base erosion and profit shifting continues to be a key priority of governments around the globe. In 2013, OECD and G20 countries, working together on an equal footing, adopted a 15-point Action Plan to address BEPS. In 2015, the BEPS package of measures was endorsed by G20 Leaders and the OECD. In order to ensure the effective and consistent implementation of the BEPS measures, the Inclusive Framework on BEPS was established in 2016 and now has 116 members. It brings together all interested countries and jurisdictions on an equal footing at the OECD Committee on Fiscal Affairs.

June 25, 2018 in BEPS, OECD | Permalink | Comments (0)

Wednesday, May 30, 2018

Corporate tax avoidance: Transparency rules adopted for tax intermediaries

On 25 May 2018, the Council adopted rules aimed at boosting transparency to prevent aggressive cross-border tax planning.

The directive targets intermediaries such as tax advisors, accountants and lawyers that design and/or promote tax planning schemes. It will require them to report schemes that are potentially aggressive.

The information received will be automatically exchanged through a centralised database. Penalties will be imposed on intermediaries that do not comply.

"The new rules are a key part of our strategy to combat corporate tax avoidance ", said Vladislav Goranov, minister for finance of Bulgaria, which currently holds the Council presidency. “With greater transparency, risks will be detected at an earlier stage and measures taken to close down loopholes before revenue is lost."

The directive was adopted at a meeting of the Economic and Financial Affairs Council, without discussion. Member States will have until 31 December 2019 to transpose it into national laws and regulations.

May 30, 2018 in BEPS | Permalink | Comments (0)

Thursday, May 17, 2018

OECD releases decisions on 11 preferential regimes of BEPS Inclusive Framework Members

Governments are continuing to make swift progress in bringing their preferential tax regimes in compliance with the OECD/G20 BEPS standards to improve the international tax framework.


Today the Inclusive Framework released the updates to the results for preferential regime reviews conducted by the Forum on Harmful Tax Practices (FHTP) in connection with BEPS Action 5:

  • Four new regimes were designed to comply with FHTP standards, meeting all aspects of transparency, exchange of information, ring fencing and substantial activities and are found to be not harmful (Lithuania, Luxembourg, Singapore, Slovak Republic).
  • Four regimes were abolished or amended to remove harmful features (Chile, Malaysia, Turkey and Uruguay). 
  • A further three regimes do not relate to geographically mobile income and/or are not concerned with business taxation, as such posing no BEPS Action 5 risks and have therefore been found to be out of scope (Kenya and two Viet Nam regimes).

Eleven new preferential regimes are identified since the last update, bringing the total to 175 regimes in over 50 jurisdictions considered by the FHTP since the creation of the Inclusive Framework. Of the 175, 31 regimes have been changed; 81 regimes require legislative changes which are in progress; 47 regimes have been determined to not pose a BEPS risk; 4 have harmful or potentially harmful features and 12 regimes are still under review.

This update shows the determination of the Inclusive Framework to comply with the international standards. For the updated table of regime results, see www.oecd.org/tax/beps/update-harmful-tax-practices-2017-progress-report-on-preferential-regimes.pdf.

For more details, please refer to the interactive map presenting key indicators and outcomes of the OECD work on international tax matters and see an overview of the review process.

May 17, 2018 in BEPS | Permalink | Comments (0)

Sunday, May 13, 2018

OECD invites public comments on the scope of the future revision of Chapter IV (administrative approaches) and Chapter VII (intra-group services) of the Transfer Pricing Guidelines

The OECD is considering starting two new projects to revise the guidance in Chapter IV (administrative approaches) and Chapter VII (intra-group services) of the Transfer Pricing Guidelines.


Public comments are invited on:


Interested parties are invited to send their comments no later than 20 June 2018 to TransferPricing@oecd.org in Word format . Comments in excess of ten pages should attach an executive summary limited to two pages.

All comments received will be made publicly available. Comments submitted in the name of a collective “grouping” or “coalition”, or by any person submitting comments on behalf of another person or group of persons, should identify all enterprises or individuals who are members of that collective group, or the person(s) on whose behalf the commentator(s) are acting.

For more information, please contact Jeff VanderWolk, Head of the Tax Treaties and Transfer Pricing Division, Tomas Balco, Head of the Transfer Pricing Unit or the Communications Office at the OECD Centre for Tax Policy and Administration.

May 13, 2018 in BEPS | Permalink | Comments (0)

Friday, May 11, 2018

Saint Lucia joins the Inclusive Framework on BEPS

The Inclusive Framework welcomes Saint Lucia bringing to 114 the total number of countries and jurisdictions participating on an equal footing in the Project.

May 11, 2018 in BEPS | Permalink | Comments (0)

Wednesday, April 25, 2018

OECD and IGF invite comments on a draft practice note that will help developing countries address profit shifting from their mining sectors via excessive interest deductions

 For many resource-rich developing countries, mineral resources present an unparalleled economic opportunity to increase government revenue. Tax base erosion and profit shifting (BEPS), combined with gaps in the capabilities of tax authorities in developing countries, threaten this prospect. One of the avenues for international profit shifting by multinational enterprises is the use of excessive interest deductions.   Download Limiting-excessive-interest-deductions-discussion-draft

Building on BEPS Action 4, this practice note has been prepared by the OECD Centre for Tax Policy and Administration under a programme of co-operation with the Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF), to help guide tax officials on how to strengthen their defences against BEPS. It is part of wider efforts to address some of the challenges developing countries are facing in raising revenue from their mining sectors. This work also complements action by the Platform for Collaboration on Tax and others to produce toolkits on top priority tax issues facing developing countries.

Comments on the draft are invited from interested stakeholders by 18 May 2018 and should be sent by email to CTP.BEPS@oecd.org. A version in French will also be released in the coming weeks.

April 25, 2018 in BEPS, OECD | Permalink | Comments (0)

Tuesday, April 3, 2018

National Security Considerations with Respect to Country-by-Country Reporting

Notice 2018-31 provides additional guidance concerning country-by-country (CbC) reporting requirements under section 6038 and §1.6038-4. In consideration of the national security interests of the United States, this notice addresses modifications to the reporting requirement under §1.6038-4 with respect to certain U.S. multinational enterprise (MNE) groups. 

Based on subsequent consultations with the Department of Defense, the Treasury Department and the IRS have determined that national security interests require modifications to the reporting requirements for U.S. MNE groups that are specified national security contractors.

The Treasury Department and the IRS intend to amend §1.6038-4 to provide the definition of specified national security contractor and modifications to the manner of reporting on Form 8975 for such U.S. MNE groups. The amended regulations will provide that U.S. MNE groups that have a Form 8975 filing obligation under §1.6038-4 and are specified national security contractors may provide Form 8975 and Schedules A (Form 8975) in the following manner:


• Complete Form 8975 with a statement at the beginning of Part II, Additional Information, that the U.S. MNE group is a specified national security contractor as defined in this notice;
• Complete one Schedule A (Form 8975) for the Tax Jurisdiction of the United States with aggregated financial and employee information for the entire U.S. MNE group in Part I, Tax Jurisdiction Information, and only the ultimate parent entity’s information in Part II, Constituent Entity Information; and
• Complete one Schedule A (Form 8975) for the Tax Jurisdiction “Stateless” with zeroes in Part I, Tax Jurisdiction Information, and only the ultimate parent entity’s information in Part II, Constituent Entity Information.

No other Schedule A (Form 8975) or additional information is required.

A specified national security contractor that has already filed Form 8975 and Schedules A (Form 8975) for prior reporting periods may file an amended Federal income tax return (following the instructions for filing of amended Federal income tax returns) and attach an amended Form 8975 and Schedules A (Form 8975) in the manner provided in section 3.02 with the amended report checkbox on Form 8975 marked. 

Download Natl security irs and cbcr

April 3, 2018 in BEPS | Permalink | Comments (0)

Monday, April 2, 2018

Tax Challenges Arising from Digitalization – Interim Report 2018

This interim report of the OECD/G20 Inclusive Framework on BEPS is a follow-up to the work delivered in 2015 under Action 1 of the BEPS Project on addressing the tax challenges of the digital economy. It sets out the Inclusive Framework’s agreed direction of work on digitalization and the international tax rules through to 2020. It describes how digitalization is also affecting other areas of the tax system, providing tax authorities with new tools that are translating into improvements in taxpayer services, improving the efficiency of tax collection and detecting tax evasion.   Download Digitalization tax interim report 2018

April 2, 2018 in BEPS, OECD | Permalink | Comments (0)

Friday, March 16, 2018

Tax Challenges Arising from Digitization – Interim Report 2018 of 110+ Countries

This interim report of the OECD/G20 Inclusive Framework on BEPS is a follow-up to the work delivered in 2015 under Action 1 of the BEPS Project on addressing the tax challenges of the digital economy. It sets out the Inclusive Framework’s agreed direction of work on digitalisation and the international tax rules through to 2020. It describes how digitalisation is also affecting other areas of the tax system, providing tax authorities with new tools that are translating into improvements in taxpayer services, improving the efficiency of tax collection and detecting tax evasion.

More than 110 countries and jurisdictions have agreed to review two key concepts of the international tax system, responding to a mandate from the G20 Finance Ministers to work on the implications of digitalisation for taxation.

The members of the OECD/G20 Inclusive Framework on BEPS will work towards a consensus-based solution by 2020, as set out in their Interim Report on the Tax Challenges Arising from Digitalisation released today. The Interim Report will be presented by OECD Secretary-General Angel Gurría to the G20 Finance Ministers at their meeting on 19-20 March in Buenos Aires, Argentina.

Building on the 2015 BEPS Action 1 Report, the Interim Report includes an in-depth analysis of the changes to business models and value creation arising from digitalisation, and identifies characteristics that are frequently observed in certain highly digitalised business models. Describing the potential implications for the international tax rules, the Interim Report identifies the positions that different countries hold, which drive their approach to possible solutions. These approaches range from those countries that consider no action is needed, to those that consider there is a need for action that would take into account user contributions, through to others who consider that any changes should apply to the economy more broadly. The Interim Report lays the ground to move forward at the OECD towards a long-term multilateral solution in the next phase of work.

“The international community has taken an important step today towards resolving the tax challenges posed by the digitalisation of the economy,” said Mr Gurría. “We have underlined the complexity of the issues, and highlighted the importance of reaching international agreement, both for our economies and the future of the rules-based system. The OECD stands ready to accompany countries as they seek to build a common understanding of the issues related to the digital economy and taxation, as well as the long-term solutions.”

Under the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project, a number of important new standards were delivered aimed at tackling double non-taxation. Country-level implementation of the wide-ranging BEPS package is already having an impact, with evidence emerging that some multinationals have already changed their tax arrangements to better align with their business operations. The measures are already delivering increased revenues for governments - for example, over 3 billion euros in the European Union alone as a result of the implementation of the new International VAT/GST Guidelines. Despite this success in tackling BEPS, the Interim Report underlines that many countries believe challenges to the international tax system still remain.

Inclusive Framework members recognise that they share a common interest in maintaining a single, relevant set of international tax rules. As part of the next phase of their work, they have agreed to undertake a coherent and concurrent review of the “nexus” and “profit allocation” rules - fundamental concepts relating to the allocation of taxing rights between jurisdictions and the determination of the relevant share of the multinational enterprise’s profits that will be subject to taxation in a given jurisdiction. In exploring potential changes, members would consider the impacts of digitalisation on the economy, relating to the principles of aligning profits with underlying economic activities and value creation.

While agreeing to work towards a long-term solution by 2020, some countries believe that there is a strong imperative to act quickly and are in favour of the introduction of interim measures, while other countries are opposed to them and consider that such measures will give rise to risks and adverse consequences. Those countries in favour have identified a number of considerations that they believe need to be taken into account to limit the possible adverse side-effects.

The Interim Report also looks at how digitalisation is affecting other areas of the tax system, including the opportunities that new technologies offer for enhancing taxpayer services and improving compliance, as well as the tax risks, including those relating to the block chain technology that underlies crypto-currencies.

March 16, 2018 in BEPS, OECD | Permalink | Comments (0)

Thursday, March 15, 2018

IRS provides additional details on section 965, transition tax; Deadlines approach for some 2017 filers

The Internal Revenue Service today provided additional information to help taxpayers meet their filing and payment requirements for the section 965 transition tax.

The Tax Cuts and Jobs Act requires various taxpayers that have untaxed foreign earnings and profits to pay a tax as if those earnings and profits had been repatriated to the‎ United States. The new law outlines details on the tax rates, and certain taxpayers may elect to pay the transition tax over eight years.

As the March 15 and April 17 deadlines approach for various filers, the IRS released information today in a question and answer format. The Frequently Asked Questions address basic information ‎for taxpayers affected by section 965. This includes how to report section 965 income and how to report and pay the associated tax liability. The information on IRS.gov also provides details on several elections under section 965 that taxpayers can make.

The Treasury Department and the IRS previously released three pieces of guidance related to section 965 issues including Notices 2018-07 and 2018-13 and Revenue Procedure 2018-17‎. The IRS will provide additional guidance and other information on IRS.gov in the weeks ahead.

March 15, 2018 in BEPS, Tax Compliance | Permalink | Comments (0)

Friday, February 23, 2018

First Global Conference of the Platform for Collaboration on Tax - Taxation and the Sustainable Development Goals

The Platform for Collaboration on Tax (PCT) held its First Global Conference on February 14-16, 2018 at the United Nations Headquarters in New York. The conference focused on the key directions for tax policy and administration needed to meet the Sustainable Development Goals (SDGs). Speakers and participants included senior country policymakers, tax administrators, and representatives from academia, the private sector, civil society, donor organizations, and regional tax organizations. Conference sessions will cover five thematic areas:

  • domestic resource mobilization and the state

  • the role of tax in supporting sustainable economic growth, investment and trade

  • the social dimensions of tax (poverty, inequality, and human development)

  • tax capacity development

  • tax cooperation. 

The conference built on the vibrant global dialogue on taxation, and insights and views from the conference helped inform and shape the future work of the PCT and its members. The conference provided guidance to individual countries and other stakeholders on how to better target tax efforts to achieve the Sustainable Development Goals (SDGs).

Plenary sessions were broadcast live herehttp://webtv.un.org   

About the PCT

The PCT is a joint initiative of the International Monetary Fund (IMF)Organization for Economic Co-operation and Development (OECD)United Nations (UN), and the World Bank Group to strengthen collaboration on domestic resource mobilization (DRM). The Platform, which is also supported by the governments ofLuxemburg, Switzerland, and the United Kingdom, fosters collective action for stronger tax systems in developing and emerging countries. The four PCT members each support country efforts through policy dialogue, technical assistance and capacity building, knowledge creation and dissemination, and input into the design and implementation of standards for international tax matters. The PCT also produces guidance and tools on key issues of capacity building and international taxation, and has also developed the Medium-Term Revenue Strategy, which is an approach for coordinated and sustained support to country-led tax reform.

February 23, 2018 in BEPS | Permalink | Comments (0)

Serbia joins the OECD Framework on BEPS

 

The Inclusive Framework on Base Erosion and Profit Shifting (BEPS) welcomed Serbia as its newest members, bringing to 112 the total
number of countries and jurisdictions participating on an equal footing in the project.

Members of the Inclusive Framework have the opportunity to work together with other OECD and G20 countries on implementing the BEPS package consistently and on developing further standards to address remaining BEPS issues.

 

February 23, 2018 in BEPS | Permalink | Comments (0)

Saturday, February 10, 2018

OECD announces further developments in BEPS implementation

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.

February 10, 2018 in BEPS | Permalink | Comments (0)

Sunday, February 4, 2018

BEPS Action 13: Jurisdictions implement final regulations for first filings of CbC Reports, with over 1400 bilateral relationships now in place for the automatic exchange of CbC information

a further important step was taken to implement Country-by-Country (CbC) Reporting in accordance with the BEPS Action 13 minimum standard, through activations of automatic exchange relationships under the Multilateral Competent Authority Agreement on the Exchange of CbC Reports ("the CbC MCAA").

The automatic exchange of Country-by-Country Reports which is set to start in June 2018 will give tax administrations around the world access to key information on the annual income and profits, as well as the capital, employees and activities of Multinational Enterprise Groups that are active within their jurisdictions. With more than six months before the first exchange deadline, there are now over 1400 automatic exchange relationships in place among jurisdictions committed to exchanging CbC Reports as of mid-2018, including those under EU Council Directive 2016/881/EU and bilateral competent authority agreements (including 31 with the United States).

The full list of automatic exchange relationships that are now in place is available on the OECD website, together with an update on the implementation of the domestic legal framework for CbC Reporting in jurisdictions; on jurisdictions that do not require CbC reporting for 2016 but will permit voluntary parent surrogate filing; and on steps that have been taken by jurisdictions to address a transitional issue for the first year of CbC reporting.

This additional wave of activations of CbC Reporting exchange relationships is another important step towards the timely implementation of Country-by-Country Reporting and reflects the commitment of BEPS Inclusive Framework members from all corners of the world to the fight against base erosion and profit shifting.

February 4, 2018 in BEPS, OECD | Permalink | Comments (0)

Saturday, February 3, 2018

Further progress made in implementation of BEPS measures against tax treaty abuse

On 15 December 2017, Jersey deposited its instrument of ratification for the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting ("multilateral convention") with the OECD. Subsequently, on 20 December 2017, Curaçao has joined the multilateral convention, following a communication from the Kingdom of the Netherlands to the OECD.[1] A provisional list of reservations and notifications for Curaçao has been provided and a definitive version will be deposited with the OECD at the time of the deposit of the instrument of ratification of the Kingdom of the Netherlands.

This underlines the strong commitment of Jersey and Curaçao to international tax standards to prevent the abuse of tax treaties and base erosion and profit shifting (BEPS) by multinational enterprises.

The multilateral convention offers concrete solutions for governments to close the gaps in existing international tax rules by transposing results from the OECD/G20 BEPS Project into bilateral tax treaties worldwide. The multilateral convention modifies the application of thousands of bilateral tax treaties concluded to eliminate double taxation. Tax treaty-related measures that may be implemented through the multilateral convention include those on hybrid mismatch arrangementstreaty abusepermanent establishment, and mutual agreement procedures, including agreed minimum standards to counter treaty abuse and to improve dispute resolution and an optional provision on mandatory binding arbitration.

"As the third jurisdiction after Austria and the Isle of Man to ratify the multilateral convention following the signing ceremony in June 2017, Jersey is a forerunner in the implementation of the far-reaching reforms agreed under the BEPS Project” said Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration. “I also welcome Curaçao as the 72nd jurisdiction covered by the convention and look forward to other jurisdictions following suit so that the benefits of the convention can take effect and improve the international tax system for the benefit of all our citizens".

Now covering 72 jurisdictions and over 1,100 treaties, the Convention is expected to be signed by additional governments in the near future. 

The multilateral convention was adopted by an ad hoc Group of over 100 jurisdictions working on an equal footing on 24 November 2016 and already covers 72 jurisdictions. The Republic of Austria became the first jurisdiction to deposit its instrument of ratification for the multilateral convention on 22 September 2017, the Isle of Man, the second, on 19 October 2017, and Jersey the third on 15 December 2017. The multilateral convention will enter into force three calendar months after the date of deposit of the fifth instrument of ratification, acceptance or approval.

The OECD is the depositary of the multilateral convention and is supporting governments in the process of signature, ratification and implementation. The position of each party and signatory under the multilateral convention is available on the OECD website.

February 3, 2018 in BEPS, OECD | Permalink | Comments (0)

Friday, December 22, 2017

OECD releases first peer reviews of the BEPS Action 5 minimum standard on spontaneous exchange on tax rulings

As part of continuing efforts to improve tax transparency and the international tax framework, the OECD has released the first analysis of individual countries' progress OECD APA Sharing Reportsin spontaneously exchanging information on tax rulings in accordance with Action 5 of the BEPS package of measures released in October 2015.

The first annual report on the exchange of information on rulings evaluates how 44 countries, including all OECD members and all G20 countries, are implementing one of the four new minimum standards agreed in the OECD/G20 BEPS Project.

A key aim of the project was to increase transparency, which resulted in a new minimum standard to ensure that information on certain tax rulings is exchanged between relevant tax administrations in a timely manner (Action 5). This minimum standard requires tax administrations to spontaneously exchange information on rulings that have been granted to a foreign related party of their resident taxpayer or a permanent establishment which, in the absence of exchange, could give rise to BEPS concerns. As a minimum standard, all members of the Inclusive Framework on BEPS have committed to implement this standard, and to have their compliance with the standard reviewed and monitored by their peers.

The standard covers rulings such as advance pricing agreements (APAs), permanent establishment rulings, related party conduit rulings, and rulings on preferential regimes. More than 10 000 relevant rulings were identified up to the end of 2016.

The annual report includes almost 50 country-specific recommendations on issues such as improving the timeliness of the exchange of information, ensuring that all relevant information on the taxpayer’s related parties is captured for exchange purposes, and ensuring that exchanges of information are made with respect to preferential tax regimes that apply to income from intellectual property.

The next annual peer review will cover all members of the Inclusive Framework, except for the developing countries that requested a deferral of their review to 2019.

December 22, 2017 in BEPS | Permalink | Comments (0)

Wednesday, December 20, 2017

The Bahamas and Zambia join the Inclusive Framework on BEPS, 110 Countries Will Impose Anti-Avoidance Regime

The Inclusive Framework on Base Erosion and Profit Shifting (BEPS) welcomed The Bahamas and Zambia as its newest members, bringing to 110 the total number of countries and jurisdictions participating on an equal footing in the project. Members of the Inclusive Framework have the opportunity to work together with other OECD and G20 countries on implementing the BEPS package consistently and on developing further standards to address remaining BEPS issues.

December 20, 2017 in BEPS | Permalink | Comments (0)

Monday, December 18, 2017

OECD releases second round of peer reviews on implementation of BEPS minimum standards on improving tax dispute resolution mechanisms

As part of continuing efforts to improve the international tax framework and tax certainty, the OECD has released the second round of analyses of individual country efforts to improve dispute resolution mechanisms. These seven peer review reports represent the second round of stage 1 evaluations of how countries are implementing new minimum standards agreed in the OECD/G20 BEPS Project.

The reports relate to implementation by AustriaFrance (also available in French)GermanyItalyLiechtensteinLuxembourg (also available in French) and Sweden. A document addressing the implementation of best practices is also available on each jurisdiction that opted to have such best practices assessed. These seven reports include over 170 recommendations relating to the minimum standard. In stage 2 of the peer review process, each jurisdiction’s efforts to address any shortcomings identified in its stage 1 peer review report will be monitored.

These stage 1 peer review reports continue to represent an important step forward to turn the political commitments made by members of the Inclusive Framework on BEPS into measureable, tangible progress. The seven jurisdictions concerned are already working to address most deficiencies identified in their respective reports. The OECD will continue to publish stage 1 peer review reports in accordance with the Action 14 peer review assessment schedule.

December 18, 2017 in BEPS | Permalink | Comments (0)