How the BEPS project and MLI may impact double tax treaties

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3 minute read 6 Dec 2017
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EY Global

Multidisciplinary professional services organization

3 minute read 6 Dec 2017

With base erosion and profit shifting implemented and the OECD multilateral instrument in effect, changes are being felt.

Nearly 60% of viewers of an EY webcast said the multilateral instrument (MLI) introduced by the Organisation for Economic Co-operation and Development (OECD) will have a significant or moderate impact on their tax strategy. But less than one in ten (7%) said they fully understood how it worked or what impact it might have on their business.

In fact, organizational and financial structures that used to be very common practice to lower tax costs are now actually very quickly causing a tax risk, says Marlies de Ruiter, EY Global International Tax Services Policy Leader

Adds Pascal Saint-Amans, Director, OECD Center for Tax Policy and Administration, “Tax audits probably have increased. We don’t have data, but I firmly believe there has been an increase.”

“The new rules are subjective,” says de Ruiter, “so they will be creating uncertainty and more controversy than we have seen until now.” 

This article was originally published in Tax Insights on  6 Dec 2017

Summary

With base erosion and profit shifting (BEPS) implemented and the OECD’s multilateral instrument (MLI) in effect, businesses are facing new anti-abuse provisions that can cause tax risk.

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EY Global

Multidisciplinary professional services organization