BEPS Action 6 interaction with treaty entitlement of non-CIV funds

BEPS Action 6, treaty entitlement of non-CIV funds

The Organisation for Economic Cooperation and Development (OECD) today announced the release of a discussion draft on follow-up work on the interaction between the treaty provisions of the report on the base erosion and profit shifting (BEPS) Action 6 and the treaty entitlement of non-CIV funds.

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Today’s OECD release includes a request for comments on draft examples included in the discussion draft on the follow-up work on the interaction between the treaty provisions of the report on BEPS Action 6 and the treaty entitlement of non-CIV funds.

Overview

Paragraph 14 of the final version of the BEPS report on Action 6 (Preventing the granting of treaty benefits in inappropriate circumstances) indicated that the OECD would continue to examine issues related to the treaty entitlement of non-CIV funds so that the new treaty provisions included in the report on BEPS Action 6 address adequately the treaty entitlement of these funds.

The OECD in March 2016 published a consultation document on the treaty entitlement of non-CIV funds that included a number of specific questions related to concerns, identified in the comments received on previous discussion drafts related to the report on BEPS Action 6, as to how the new provisions included in that report could affect the treaty entitlement of non-CIV funds as well as possible ways of addressing these concerns. Comments were received in response to that consultation document. 

Today’s discussion draft has been prepared to provide stakeholders with information on the subsequent developments in the work on the interaction between the treaty provisions of the report on BEPS Action 6 and the treaty entitlement of non-CIV funds, including the conclusions reached at the May 2016 meeting of Working Party 1 and the subsequent work on the development of examples related to the application of the principal purposes test rule included in the BEPS Action 6 report with respect to some common transactions involving non-CIV funds. The discussion draft invites comments on three draft examples under consideration by the Working Party for inclusion in the commentary on the principal purposes test rule. Comments are requested by 3 February 2017.

Kazakhstan, Côte d’Ivoire, Bermuda join BEPS framework

The OECD today also announced that Kazakhstan, Côte d’Ivoire, and Bermuda are joining the inclusive framework on BEPS, bringing the total number of countries and jurisdictions participating on an equal footing in the BEPS project to 94.  Read the OECD release.

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