The Organisation for Economic Cooperation and Development (OECD) on 31 May 2016, released a discussion draft on BEPS Action 15: “Development of a multilateral instrument to implement the tax treaty-related BEPS measures.” The discussion draft requests comments on technical issues related to the development of the multilateral instrument, which is anticipated to be finalized and open for signature by 31 December 2016.
In the discussion draft, the OECD: (1) summarizes the provisions that are expected to be included in the multilateral instrument; and (2) describes and requests comments on technical issues arising from its development, including issues to be considered in the context of the optional provision on mandatory arbitration.
Action 2: Neutralizing the effects of hybrid mismatch arrangements
Action 6: Preventing the granting of treaty benefits in inappropriate circumstances
Action 7: Preventing the artificial avoidance of PE status
Action 14: Making dispute resolution mechanisms more effective
In a 15 February 2016 letter, the United States Council for International Business (USCIB) expressed its support for the adoption of mandatory binding arbitration to Robert Stack, Deputy Assistant Secretary for International Affairs, U.S. Treasury Department, with a preference for a “short form” or “last best offer” format, indicating that this format reduces the length of time to decision, thereby minimizing uncertainty and cost of arbitration while at the same time protecting and encouraging business investment.
The list of provisions to be included in the multilateral instrument is similar to the list that was provided in the final report on BEPS Action 15 in October 2015.
The discussion draft makes clear that the OECD only seeks comments on technical issues regarding the development of the multilateral instrument and provides examples, including:
The types of technical issues identified in the discussion draft are fundamental issues that likely were identified previously and about which substantial discussions probably have taken place.
For more information contact a KPMG tax professional:
Stephanie Robinson | +1 (202) 533 4049 | email@example.com
Mari White | +1 (617) 988 5453 | firstname.lastname@example.org
© 2016 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved.
The KPMG logo and name are trademarks of KPMG International. KPMG International is a Swiss cooperative that serves as a coordinating entity for a network of independent member firms. KPMG International provides no audit or other client services. Such services are provided solely by member firms in their respective geographic areas. KPMG International and its member firms are legally distinct and separate entities. They are not and nothing contained herein shall be construed to place these entities in the relationship of parents, subsidiaries, agents, partners, or joint venturers. No member firm has any authority (actual, apparent, implied or otherwise) to obligate or bind KPMG International or any member firm in any manner whatsoever. The information contained in herein is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such information is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act on such information without appropriate professional advice after a thorough examination of the particular situation. For more information, contact KPMG's Federal Tax Legislative and Regulatory Services Group at: + 1 202 533 4366, 1801 K Street NW, Washington, DC 20006.