BEPS: Action 7 preventing artificial avoidance of PE status

BEPS: Action 7 preventing artificial avoidance

The Organisation for Economic Co-operation and Development (OECD) today released a new, revised discussion draft containing proposals resulting from the work on Action 7 (prevent artificial avoidance of PE status) under the base erosion and profit shifting (BEP) project.


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In October 2014, the OECD released an initial or the first discussion draft on BEPS Action 7. That discussion draft examined a number of PE avoidance strategies and included a number of alternative options on how to deal with these strategies.

Based on comments received with respect to the October 2014 discussion draft and interventions at a public consultation meeting held 21 January 2015, the options included in the first discussion draft were reviewed so as to produce a specific preferred proposal with respect to each PE avoidance strategy previously identified.

New Action 7 discussion draft

Today’s revised discussion draft [PDF 315 KB] under BEPS Action 7 reflects the proposals that resulted from that work and on which comments are now invited.

Comments are due by 12 June 2015. No public consultation meeting is scheduled on the second discussion draft.

The OECD release states that “Comments should be kept as short as possible: commentators should note that the proposals in this second discussion draft were all included among the options that appeared in the October 2014 discussion draft on which extensive comments were submitted and on which a public consultation meeting was held on 21 January 2015.”

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