BEPS: Follow-up work under Action 6 (prevent treaty abuse)

BEPS: Discussion draft on follow-up work under Action 6

The Organisation for Economic Cooperation and Development (OECD) today released a discussion draft concerning follow-up work as mandated under a report with respect to Action 6 (prevent treaty abuse) under the base erosion and profit shifting (BEPS) action plan.

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Read the discussion draft [PDF 179 KB] 


The OECD in September 2014 released it deliverable on BEPS Action 6 (Preventing the Granting of Treaty Benefits in Inappropriate Circumstances). The proposed changes to the OECD Model Tax Convention presented in the recommendations (i.e., the BEPS Action 6 deliverable) reflected an agreement of the delegates of the OECD member countries and G20 countries that states incorporate in their treaties sufficient safeguards to prevent treaty abuse, including treaty shopping. Given the variety of approaches to limit treaty shopping, the BEPS Action 6 deliverable recommended alternative model provisions that may be adapted based upon the specificities of individual countries and the circumstances of the negotiation of bilateral treaties. Read more in TaxNewsFlash-United States.

Paragraph 5 of the Report on Action 6 (Prevent the granting of treaty benefits in inappropriate circumstances) indicated that follow-up work would be done with respect to certain aspects.


…it is recognised that further work will be needed with respect to the precise contents of the model provisions and related Commentary included in Section A of this report, in particular the LOB rule. Further work is also needed with respect to the implementation of the minimum standard and with respect to the policy considerations relevant to treaty entitlement of collective investment vehicles (CIVs) and non-CIV funds. The model provisions and related Commentary included in Section A of this report should therefore be considered as drafts that are subject to improvement before their final version is released in September 2015...

Follow-up work discussion draft

Today’s discussion draft concerns the follow-up work related to the contents of the model provisions and related Commentary—in particular:

  • The LOB (limitation on benefits) rule
  • Issues related to the treaty entitlement of collective investment vehicles (CIVs) and non-CIV funds

Today’s OECD release reports that the results of the discussions as to how countries intend to implement the minimum standard will be included in the revised version of the report that is to be released in 2015.

The discussion draft identifies the various issues on which there will be follow-up work and includes specific questions on which comments are invited.

Comments requested

The Committee on Fiscal Affairs (CFA) has invited interested parties to send comments on the discussion draft which includes a number of questions and proposals concerning aspects of the report on BEPS Action 6 on which further work is being conducted.

Today’s OECD release cautions that the views and proposals included in the discussion draft do not represent the consensus views of the CFA or its subsidiary bodies but are intended to provide stakeholders with substantive proposals for analysis and comment.

Comments are due by 9 January 2015.

A public consultation on BEPS Action 6 is scheduled to be held in Paris at the OECD Conference Centre on 22 January 2015.

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