• Service: Tax, Global Compliance Management Services, International Tax
  • Type: Regulatory update
  • Date: 3/14/2014

OECD - Discussion draft proposals to prevent treaty abuse (BEPS) 

March 14: The Organisation for Economic Co-operation and Development (OECD) today released a discussion draft concerning Action 6 (Prevent Treaty Abuse) under the BEPS* Action Plan.

*BEPS = base erosion and profit shifting

BEPS Action 6 identifies treaty abuse, and in particular treaty shopping, as a source of BEPS concerns.

As explained by today’s OECD release, the discussion draft provides a consultation process and invites interested parties to send comments with respect to the preliminary results in the three different areas identified in Action 6:

  • Develop model treaty provisions and recommendations regarding the design of domestic rules to prevent the granting of treaty benefits in inappropriate circumstances
  • Clarify that tax treaties are not intended to be used to generate double non-taxation
  • Identify the tax policy considerations that, in general, countries need to consider before deciding to enter into a tax treaty with another country

Comments are due by 9 April 2014.

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