Global Tax Alert | 19 July 2013

OECD releases Action Plan on Base Erosion and Profit Shifting (BEPS)

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The OECD on 19 July 2013 released its “Action Plan” describing the specific focus areas for the next phase of its project on addressing base erosion and profit shifting.

Following up on the OECD’s initial BEPS report issued in February 2013, the Action Plan sets forth the work that the OECD will do in 15 areas of international tax law and practice. The Action Plan includes deadlines for the action areas that range from September 2014 through December 2015. The Action Plan identifies the expected OECD output in these action areas as including OECD reports and analyses, changes to the OECD transfer pricing guidelines, changes to the OECD model tax treaty, OECD recommendations for domestic law, and development of a multilateral treaty approach.

The 15 BEPS action areas where the work of the OECD will be focused are as follows:

1. Tax challenges of the digital economy

2. Hybrid mismatch arrangements

3. CFC rules

4. Deductibility of interest and other financial payments

5. Harmful tax practices of countries

6. Treaty abuse

7. Artificial avoidance of permanent establishment status

8. Transfer pricing for intangibles

9. Transfer pricing for risks and capital

10. Transfer pricing for other high-risk transactions

11. Development of data on BEPS and actions addressing it

12. Disclosure of aggressive tax planning arrangements

13. Transfer pricing documentation

14. Effectiveness of treaty dispute resolution mechanisms

15. Development of a multilateral instrument for amending bilateral tax treaties

The Action Plan proposes approaches for involvement of non-member countries in the OECD work on BEPS. The Action Plan also indicates that the business community will be invited to comment on the various proposals and that a consultative process will be used in this phase of the BEPS project.

A detailed Tax Alert on the OECD BEPS action plan is forthcoming.

For additional information with respect to this Alert, please contact the following:

Ernst & Young LLP (United Kingdom), London
  • Alex Postma
    +44 20 7980 0286
    alex.postma@uk.ey.com
  • Mat Mealey
    +44 20 7951 0739
    mmealey@uk.ey.com
Ernst & Young LLP, International Tax Services, Washington, DC
  • Barbara Angus
    +1 202 327 5824
    barbara.angus@ey.com
Ernst & Young Belastingadviseurs LLP, Amsterdam
  • Ronald van den Brekel
    +31 88 40 79016
    ronald.van.den.brekel@nl.ey.com

EYG no. CM3660