A joint initiative of the IMF, OECD, UN, and World Bank Group is seeking public feedback on a “draft toolkit” that is intended to help developing countries address the complexities of taxing offshore indirect transfers of assets.
According to an OECD release, the practice of indirect transfers of assets by some multinational corporations is viewed as an attempt to minimize their tax liability. The tax treatment of offshore indirect transfers—that is, the sale of an entity located in one country that owns an "immovable" asset located in another country, by a non-resident of the country where the asset is located—has emerged as a “significant concern” in many developing countries. The OECD and other parties to the joint initiative report that these transfers have become a relatively common practice for some multinational corporations trying to minimize their tax burden, and reflect an increasingly critical tax issue.
The OECD release notes that there is no unifying principle on how to treat these transactions, and the issue was not addressed in the OECD/G20 base erosion and profit shifting (BEPS) project. Accordingly, the draft toolkit:
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