Australia

Details

  • Service: Tax, Corporate Tax, Global Transfer Pricing Services, Topics, Base Erosion and Profit Shifting
  • Type: Regulatory update
  • Date: 18/11/2013

Tax Insights

KPMG's analysis of tax issues and developments.

Jenny Wong

Jenny Wong
Director, Tax

+61 2 9335 8661

jywong@kpmg.com.au

Top 5 OECD BEPS developments 

by Jenny Wong, Australian Tax Centre

10 years ago if you Googled ‘Base Erosion and Profit Shifting (BEPS)’, the American hip hop group The Black Eyed Peas would have ranked number one in the results, with the release of their hit single Where Is The Love? The lyrics go: “What’s wrong with the world, mama…I think the whole world addicted to the drama…”. Fast forward 10 years, the world is addicted to another BEPS drama, which if it could be sung, would undoubtedly be the best selling single to hit the global charts of all Organisation for Economic Co-operation and Development (OECD) nations.

Here are the top 5 recent BEPS related developments in the last month:

 

1. Transfer Pricing
In November, the OECD reported on its public consultation on transfer pricing aspects of intangibles, transfer pricing documentation, BEPS Action Plan to adopt country by country reporting of selected company financial data to tax administrations. Read November 2013 report. 

2. New Zealand

The Inland Revenue Department (IRD) released policy documents highlighting the increasing tax focus on multinational businesses. Alternatives to the current thin capitalisation tests, broadening the ambit of New Zealand’s transfer pricing rules, and tightening the deductibility rules for hybrids are some issues being considered. 

3. Norway

Norway's 2014 budget proposes to limit intra-group interest expense deductions to an amount that is 30 percent of taxable ordinary income, as adjusted for the value of tax depreciation and net interest expenses for tax purposes. 

4. Ireland

In Ireland's 2014 budget, the Minister of Finance announced changes to the company residence rules that would eliminate mismatches that may exist between tax treaty partners and that are used to allow companies to be ‘stateless’ in terms of their place of tax residence. 

5. South Africa

South Africa will work with the United Kingdom (UK) to address offshore tax evasion, and will join the pilot program for automatic exchange of tax information launched by the UK, along with France, Germany, Italy, and Spain.

 

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