BEPS 

In the past two years, there has been an unprecedented and substantial focus on the international tax agenda from the media, politicians, public authorities and the general public. Governments have engaged the OECD to address base erosion and profit shifting ("BEPS").

As the timeline is strict and the published action plans is ambitious, now is the time for senior management to address the impact of the new tax landscape on their organisation. The Danish tax authorities have already identified BEPS-related initiatives in their 2015 action plan and used BEPS discussion drafts in recent transfer pricing audits.

Why now?

  • To proactively solve discrepancies between your tax strategy and the BEPS initiatives
  • To be prepared for the higher transparency requirements which will lead to higher scrutiny of transfer pricing in the future
  • To be prepared for the Danish tax authorities requesting BEPS-related information already now as they are already implementing BEPS initiatives
  • To be prepared for some tax structures potentially being challenged post-BEPS

Impact of BEPS

The BEPS project will lead to increased business transparency, consistency in international tax rules and higher documentation requirements.

How can we help?

In the light of these developments, we wish to help you address the new tax landscape and any present risks that can be mitigated before the implementation of BEPS. We can help to:
  • identify main risks and possibilities related to the BEPS deliverables;
  • ensure that design data extractors comply with the requirements for Country-by-Country reporting;
  • provide heat map of the countries, structures and functions to focus on;
  • perform thorough value chain mapping to ensure alignment between value creation and profit allocation;
  • assess your organisation’s readiness to the new tax agenda and take necessary action;
  • assist in the preparation of a BEPS readiness report, including an assessment of transfer pricing policies, processes and controls and of the current state of the documentation package.


    OECD BEPS Action Plan Items 

    Action 1 – Address tax challenges of the digital economy 

    Action 2 – Neutralize effects of hybrid mismatch arrangements 

    Action 3 – Strengthen controlled foreign company rules

    Action 4 – Limit base erosion via interest deductions and other financial payments

    Action 5 – Counter harmful tax practices more effectively, taking into account transparency and substance

    Action 6 – Prevent treaty abuse

    Action 7 – Prevent artificial avoidance of permanent establishment status

    Actions 8, 9, 10 – Assure transfer pricing outcomes are in line with value creation 

    Action 8 – intangibles
    Action 9 – risks and capital
    Action 10 – other high-risk transactions

    Action 11 – Establish methodologies to collect and analyze data on BEPS and the actions to address it

    Action 12 – Require taxpayers to disclose their aggressive tax planning arrangements

    Action 13 – Re-examine transfer pricing documentation

    Action 14 – Make dispute resolution mechanisms more effective

    Action 15 – Develop a multilateral instrument

     

    Source, KPMG International 2014

    Contact Us

    Simon Schaadt

    Simon Schaadt

    Tax Partner

    +45 5374 7044

    Martin Nielsen

    Martin Nielsen

    Tax Partner

    +45 5374 7055

    Sign up for Tax updates!

    Feature image
    Join KPMG Acor Tax's mailing list to receive industry updates and event invitations. Subscribe at taxmatters@kpmg.com

    Download the latest issue of Tax Matters

    TaxNewsFlash BEPS

    TaxNewsFlash BEPS
    KPMG’s TaxNewsFlash series provides a summary of the latest tax developments being reported by KPMG firms from around the globe.

    Global Transfer Pricing Review

    Global Transfer Pricing Review
    This Review provides a wealth of local country transfer pricing information, including documentation requirements, deadlines, transfer pricing methods, penalties, special considerations, advance pricing arrangements, and competent authority matters.