BEPS Action 6: Treaty abuse and the principal purpose test

BEPS Action 6

The OECD’s final BEPS Action Plan 6 (“AP6”) report in 2015 on “The Granting of Treaty Benefits in Inappropriate Circumstances” deferred until 2016 the detailed consideration of the application of changes under AP6 for non-CIVs, being Pension Funds, Sovereign Wealth Funds and Managed Funds (“Funds”) investing into alternative assets such as infrastructure, private equity and real estate.

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BEPS Action 6: Treaty abuse and the principal purpose test

This process is now moving forward and we expect the OECD to release a consultation document shortly, with comments due in April 2016. Clarification of guidance is due to be released in the second half of 2016. AP6 will be a key consideration when it comes to performing due diligence on target groups’ tax affairs and structuring transactions.

Read the full article in the M&A Matters Spring edition PDF to hear more on:

  • What is the PPT?
  • Can the PPT have any impact where there is no net additional benefit?
  • PPT in the managed fund context
  • Look-through outcomes


For further information, please contact: 

Naz Klendjian

Partner, KPMG in the UK

Sarah Goodman

Assistant Manager, KPMG in the UK

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