OECD/G20 BEPS
PROJECT
The Final Reports
1869
Globalisation
2
1869
2010
1890
1980
1920
2013
1950
Profit
Base
TaxErosion
Base
Shifting
International Tax Rules
3
July 2013
October 2015
4
Coherence
Substance
Transparency
Hybrid Mismatch
Arrangements (2)
Preventing Tax Treaty
Abuse (6)
Methodologies and
Data Analysis (11)
Interest
Deductions (4)
CFC Rules (3)
Harmful Tax
Practices (5)
Avoidance of
PE Status (7)
TP Aspects of
Intangibles (8)
TP/Risk and
Capital (9)
TP/High Risk
Transactions (10)
Disclosure
Rules (12)
TP Documentation
(13)
Dispute
Resolution (14)
Digital Economy (1)
Multilateral Instrument (15)
Action Items
5
What’s in the BEPS
package?
Minimum
standards
Reinforced
international
standards on tax
treaties and
transfer pricing
Common
approaches and
best practices
for domestic law
measures
Analytical
reports with
recommendations
(digital economy
and multilateral
instrument)
Detailed report
on measuring
BEPS
6
International Consensus
7
Fiscal and economic effects
Global annual CIT revenue
Concentration of investments
Net FDI to GDP ratios
have increased sharply
Loss of 4-10%
(USD 100-240 bn)
Better data is needed
MNE effective tax rates
4% – 8.5% lower
ETR than similar
domestic firms
%
•
To assess the effects of BEPS on shifting real economic
activity
•
To perform statistical analysis based on Country-bycountry reports
Key data on BEPS
•
To update periodic Corporate Tax Statistics
8
WHAT IS THE
IMPACT ON
BEPS?
9
Expected impact
BEPS in a nutshell
on BEPS
HQ
Ultimate Residence
Country
(High Tax)
Parent Co
• Ineffective/No CFC Rules
• Maximise Deductions
• Minimise Assets/Risks
High Tax
Intermediate
Country
Low Tax Intermediate
Country
Maximise
Assets/Risks
Market or
Production
Country
(High Tax)
Intermediate
Co 2
• Avoid Taxable
Presence or
• Minimise
Assets/Risks
Intermediate
Co 1
Local
Activity
• Hybrid
Mismatch
• Preferential
Regime
• Maximise
Deductions
Low or no
Withholding
tax
Expected impact
BEPS in a nutshell
on BEPS
• Ineffective/No
ActionCFC
3 Rules
Ultimate Residence
Country
(High Tax)
Parent Co
• Maximise
Deductions
Action
4
• Minimise
Assets/Risks
Action
8-10
High Tax
Intermediate
Country
Low Tax Intermediate
Country
Maximise
Action
8-10
Assets/Risks
Market or
Production
Country
(High Tax)
Intermediate
Co 2
• Avoid Taxable
Action or
7
Presence
• Minimise
Action
8-10
Assets/Risks
Intermediate
Co 1
Local
Activity
• Hybrid
Action 2
Mismatch
• Preferential
Action 5
Regime
• Maximise
Action 4
Deductions
Low or no
Withholding
Action 6
tax
Address
techniques
used
totoavoid
Limit
Common
interest
approach
deductibility:
Nexus
approach
uses
Address
treaty
abuse
through
a
Align
substance
with
value
Include
income
creating
the
PE
status,
e.g.
by
replacing
introduce
Common
coordination
approach
on
tools.
net
minimum
standards
onin
treaty
creation
expenditure
through
revised/new
on R&D
as
aa
BEPS
concerns
the
distributor
with
a
commissionnaire
shopping
(i.e.
LOB
and/or
PPT)
guidance
for
applying
the
ALP:
interest
Combination
deductions
of
primary
limited
and
to
Proxy
for
Activity
in
IP
definition
of CFC
income,
e.g.
arrangement;
by
artificially
and
anti-abuse
clauses
delineation
ofregimes.
actual
transaction,
defensive
aother
percentage
rules.
(between
Ordering
income
from
digital
salesto
fragmenting
business
activities
risk10%-30%)
allocation,
intangibles
rule
that
avoids
of
EBITDA
double
plus
Compulsory
take
advantage
ofspontaneous
exceptions
that
including
HTVI, CCA,
taxation
optional
while
group
preventing
wide
ratio
exchange
of information
on
were
initially
adopted
toand
prevent
commodity
transactions
double
the
taxation
of non-taxation
mere preparatory or
rulings
services
Action
13 and/or by
auxiliary activities;
splitting-up construction contracts
Exchange
of
rulings
Country-by-Country
Reporting
FHTP
MAC
Membership
Mandatory disclosure
Transparency
12
Number of cases
MAP cases initiated / completed by year
2500
2250
2000
1750
1500
1250
1000
750
2266
1910
1624
1599
1036
1176
1341
1311
1348
843
883
2006
2007
904
2008
1678
1571
1187
1146
2011
2012
1299
951
2009
2010
Year
2013
2014
Dispute Resolution
13
Minimum Standard
+
Peer review
+
Supplementary commitment
Mandatory binding
MAP arbitration
A large group of countries
>90% of MAP
cases
Dispute Resolution
14
New and
revised rules
Transparency
Legal certainty and
dispute resolution
Monitoring
Holistic Approach
Q 15
WHAT’S
NEXT?
16
G20 Leaders 16 November 2015
“We, therefore, strongly urge the timely implementation
of the project and encourage all countries and
jurisdictions, including developing ones, to participate.
To monitor the implementation of the BEPS project
globally, we call on the OECD to develop an inclusive
framework by early 2016 with the involvement of
interested non-G20 countries and jurisdictions which
commit to implement the BEPS project, including
developing economies, on an equal footing.”
Inclusiveness
Q 17
Website: www.oecd.org/tax/beps.htm
Contact: CTP.BEPS@oecd.org
Tax email alerts:
www.oecd.org/ctp/tax-news.htm
Via Twitter: Follow us via @OECDtax
18