The OECD action plan on base erosion and profit shifting (BEPS) was commissioned by the G20, and was developed in co-operation with the European Union, governments, and the business community. The goals of the OECD action plan include:
- To identify concrete strategies for addressing tax base erosion and taxpayer profit shifting
- To provide for a “level playing field” among tax systems and for taxpayers
According to statements made during today’s press briefing, the OECD action plan will address avenues that have been left open to structures that lead to double non-taxation through, for example, the use of hybrid instruments, interest deduction with no related taxation, and the artificial shifting of business profits to low-tax jurisdictions.
The OECD action plan will include:
- Recommendations for coordination of domestic rules
- Greater transparency through the disclosure by multinational enterprises of tax planning arrangements
- Updates for the OECD model income tax treaty and OECD transfer pricing guidelines
The OECD action plan represents an initial step in potential government actions with respect to BEPS strategies. Obviously, additional work will still be necessary (for example, detailed recommendations for tax administrations are not provided and legislation will be required in most countries).
The OECD action plan establishes an aggressive time frame in that most recommendations will need to be implemented by 2014.
The action plan itself is under embargo until Friday, 19 July 2013 10:00 am Paris time, when it will be presented by the OECD Secretary-General Angel Gurría at the meeting of G20 Finance Ministers and Central Bank Governors in Moscow.
The OECD action plan and KPMG’s analysis will be sent to you at that time.