OECD Tax Talks webcast

OECD Tax Talks webcast

The latest webcast gave an update on the OECD’s tax work.

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The OECD’s Centre for Tax Policy and Administration held the latest in its series of Tax Talks webcasts on 26 June 2017. Among other topics covered, the webcast discussed progress on the BEPS Inclusive Framework project, including the Multilateral Instrument (MLI), transfer pricing, and branch mismatch arrangements, as well as the work the OECD is doing on tax transparency and exchange of information. There was also a look ahead to the upcoming G20 summit in Hamburg, and more of the OECD’s future work.

General updates (not BEPS Action specific)

Vietnam has joined the BEPS Inclusive Framework, making it the 100th member, with around 95 percent of the world’s economy now committed to implementing BEPS.

An update report on the BEPS project, including next steps, will be presented at the upcoming G20 meeting in Hamburg (July 2017). This report will also include a report from the Global Forum on Transparency and Exchange of Information for Tax Purposes.

It is expected that going forward, an annual report on the progress of the BEPS project will be published.

BEPS Action 1: Digital Economy

The OECD is planning to hold a public consultation on the tax challenges of the digital economy in October/November, with reports to be published in the interim.

BEPS Action 2: hybrid mismatches

A final report on branch mismatches is expected to be released in July. The report will set out recommendations on domestic law changes to address the treatment of branch mismatches, to ensure consistency with both the OECD’s recommendations and the proposals of the EU’s Anti-Tax Avoidance Directive II.

BEPS Actions 8 – 10: Transfer Pricing

Two discussion drafts are currently active on transfer pricing matters:

  • Transactional Profit Split Method – This discussion draft considers how to establish whether the profit split methodology is the most appropriate, how to identify what profits should be split, profit splitting factors, and a number of examples.
  • Attribution of Profits to Permanent Establishments – The discussion draft requests comments on the new proposed approach following previous concerns raised by some stakeholders. It gives illustrative examples of profits attributed to deemed PEs arising under Article 5(5) of the OECD Model Tax Convention, as well as PEs arising under the new anti-fragmentation rule.

Comments on both discussion drafts are due by 15 September with public consultations expected in November 2017.

The OECD has also stated that it expects the 2017 version of its transfer pricing guidelines to be available in early July.

BEPS Action 13: CbC Reporting

An update on implementation progress was provided:

  • 55 jurisdictions have taken some steps to implement CbC filing obligations for MNE groups; 30 jurisdictions have put a full legal framework for CbC in place; and 38 jurisdictions are implementing an obligation to submit a master file and local file.
  • There are now over 850 bilateral exchange relationships for the sharing of CbC reports.
  • A tailored capacity building plan has also been developed to assist developing countries in implementing CbC.

BEPS Action 15: Multilateral Instrument

The OECD showed a preview of the MLI Matching Database which it is currently developing. It is hoped that the database will be online sometime in July.

Mauritius is expected to sign the MLI this week.

Peer reviews of BEPS minimum standards

Work has continued on the relevant actions, with reports expected on the following areas:

  • Progress made by 125 tax regimes in countering harmful tax practices (BEPS Action 5) – report due summer 2017.
  • Progress made on the exchange of information on tax rulings (BEPS Action 5) – report on first round of peer reviews due 2018.
  • Progress on the Mutual Assistance Procedure (MAP, BEPS Action 14) – reports on peer reviews due 2017 and 2018.

The peer review for BEPS Action 6 (Treaty Benefits) will start in the future.

Automatic Exchange of Information and the Common Reporting Standard (CRS)

The CRS asks jurisdictions to obtain information from their financial institutions and automatically exchange that information with other jurisdictions on an annual basis. The first exchanges among 50 countries are due to begin in September.

The webcast replay can be viewed here.

For further information please contact:

Sarah Beeraje

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