The OECD held a webcast on 16 June 2016 to provide an update on activity relating to their base erosion and profit shifting (BEPS) project. The update focused on three areas: firstly, on progress in implementation, both at the OECD and regional levels; secondly on action to be taken to review and monitor the implementation of the BEPS recommendations; and finally to assess the adoption of the BEPS approach in Developing Countries.
The webcast started with Pascal Saint-Amans (Director of the Centre for Tax Policy and Administration) providing a round-up of the progress made over recent weeks and months in progressing the implementation of the BEPS recommendations at an international and regional level. He confirmed that the OECD remains on track to deliver the Multilateral Instrument (MLI, BEPS Action 15) on time. It is anticipated that the text of the MLI will be adopted in November 2016, with the instrument open for signature at the start of 2017. If all 96 countries who have so far committed to the development of the instrument go on to sign up to it, this would cover over 2,000 bilateral treaties.
Updates were also provided in relation to progress with the Common Reporting Standard (commitment from 101 countries); the expansion of the Global Tax Forum (134 countries); and an increasing number of countries committing to the automatic exchange of information.
Achim Prost (Head of International Co-operation and Tax Administration) provided an overview of the review and monitoring mechanisms for the local adoption of the OECD’s recommendations. For those actions where the OECD has recommended a minimum standard, a ‘peer review’ approach is proposed. This covers BEPS actions 5, 6, 13 and 14. All other actions will be subject to a ‘monitoring’ approach.
Particular mention was made in respect of Action 13, with 48 jurisdictions now having implemented (or intending to implement) country by country reporting. The OECD is developing a secure transmission system to facilitate the effective and appropriate sharing of information between tax authorities. It was also noted that good progress has been made in respect of Action 14, with a specific comment that at a recent meeting of 44 tax commissioners it was notable that there is a keen desire to use Action 14 not just to address tax avoidance but also to prevent double taxation.
Finally, Ben Dickinson (Head of Tax and Development) summarised the progress made in respect of helping developing countries to implement the BEPS measures. This includes the development of eight implementation toolkits.
A recording of the webcast can be accessed here.
As previously publicised on the OECD’s website, there are a number of upcoming opportunities for stakeholder input. The OECD are also working on discussion drafts relating to Actions 7 (profit attribution for permanent establishments) and 8-10 (the profit split method).
Also on the agenda for next month is the 2016 Global Tax Symposium (23 July), which will bring together Finance Ministers and Central Bank Governors to discuss the challenge of achieving innovation and growth whilst also promoting tax equality.
The next webcast will be held in the middle of July, to provide a further update on BEPS implementation status.
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