In October 2015, two and a half years of frenetic activity culminated in the release of the final reports of the G20/OECD ‘Action Plan’. These outline the changes necessary to make the international tax framework ‘fit for purpose’ in the digital age.
As the Organisation for Economic Cooperation and Development (OECD) comes to the end of its ambitious two-and-a-half-year BEPS project to design a new framework for international tax, has it found a better and more internationally coherent approach?
This March, the OECD Global Forum on Transparency and Exchange of Information (hereinafter: Global Forum) approved the entry of Switzerland to phase 2 of the so-called “peer review” and concluded Hungary’s phase 2 review in which our country received the rating “largely compliant”.
Two of the BEPS actions published so far (Actions 8 and 13) deal with transfer pricing. From these two, Action 13 specifically summarizes the BEPS guidance on transfer pricing documentation and country-by-country reporting.
Action 6 of the OECD BEPS Action Plans deals with the prevention of double tax treaty (hereinafter: treaty) abuse. OECD finds that one of the most pressing BEPS issues is treaty abuse and especially the so-called treaty shopping (which basically means the use of tax benefits deriving from residence related and other differences between treaties) and for this reason, a separate action plan was dedicated to this matter.
In this post, I summarize Action 2 of the BEPS package published by OECD in September the aim of which is to neutralize the effects of so-called hybrid mismatch arrangements, referred to hereinafter as “hybrid arrangements”, “hybrid structures” or simply as “hybrids”.
The UK Government has released details of proposed rules on diversion of profits from the UK, thus firing a warning shot at large multinational businesses that they consider are not paying their fair share of UK corporate taxes.
In my last two posts, I presented the actions of BEPS which were published by OECD in September and which are considered final. In the coming weeks, I will move on to the reports that were intended as transitional.
The importance of the action The OECD BEPS study concludes that \"the digital economy is increasingly becoming the economy itself”, therefore it is of utmost importance that we face those new challenges that arise as a result of this process. It is sufficient to think of e-commerce, financial transactions or online training, but according to the study we do not have to wait long for e-health services (remote health services) to become widespread. To highlight the importance of the issue, it is sufficient to note that the size of total worldwide e-commerce was estimated to amount to USD 16 trillion (!) in 2013.
In this post, I will examine Action 15, which analyses the feasibility of a multilateral “instrument” aimed at the modification of bilateral double tax treaties, which will mostly likely take the form of an agreement.