OECD: BEPS inclusive framework members | KPMG | US

OECD: Review of 11 preferential regimes, BEPS inclusive framework members

OECD: BEPS inclusive framework members

The Organisation for Economic Cooperation and Development (OECD) today issued a release that updates the results of preferential regime reviews conducted by the “Forum on Harmful Tax Practices” (FHTP) in connection with Action 5* under the base erosion and profit shifting (BEPS) project.

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*BEPS Action 5, Countering harmful tax practices more effectively, taking into account transparency and substance

Today’s OECD release lists the following updates:

  • Four new regimes were designed to comply with FHTP standards—meeting all aspects of transparency, exchange of information, ring fencing and substantial activities—and were found to be not harmful (Lithuania, Luxembourg, Singapore, Slovak Republic).
  • Four regimes were repealed or amended to remove harmful features (Chile, Malaysia, Turkey and Uruguay). 
  • Three regimes were found not to relate to geographically mobile income and/or were not concerned with business taxation, and as such posed no BEPS Action 5 risks and were found to be “out of scope” (Kenya and two Vietnam regimes).

Eleven new preferential regimes were identified since the last update, bringing the total to 175 regimes in over 50 jurisdictions considered by the FHTP since the creation of the inclusive framework. Of the 175 regimes: 31 have been changed; 81 require legislative changes (in progress); 47 have been determined to not pose a BEPS risk; four have harmful or potentially harmful features; and 12 are still under review.

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