BEPS Archives - Treasury Improvement

BEPS Action 12 – Mandatory Disclosure Rules

BEPS Action 12 aims to increase the information flow on tax risks to tax administrations and tax policy makers. Recommendations provide a modular framework that enables countries without mandatory disclosure rules to design a regime that fits their need to obtain early information on potentially aggressive or abusive tax planning schemes and their users. There […]

BEPS Actions 8-10 – Transfer Pricing

Within the BEPS project three actions have been initiated to target concerns around transfer pricing. Increasing globalization of the economy has led to an increase in intra-group trade. To determine the conditions of intra-group trade, including the price, transfer pricing rules have been set up for tax purposes. The impact of these rules has become […]

BEPS Action 7 – Permanent Establishment Status

BEPS Action 7 provides a review of the definition of a permanent establishment. This is needed because generally tax treaties provide that profits of a foreign enterprise are taxable in a state only when it has a permanent establishment to which the profits are attributable. The definition of what a permanent establishment is becomes crucial […]

BEPS Action 6 – Treaty Abuse

BEPS Action 6 identifies treaty shopping as one of the most important sources of BEPS concerns. Countries that do not have anti-abuse provisions in their tax treaties are exposed to lower tax revenues. Therefore it has been agreed between countries to include anti-abuse provisions in their tax treaties, including a minimum standard to counter treaty […]

BEPS Action 5 – Harmful Tax Practices

In 1998 the report Harmful Tax Competition: An Emerging Global Issue was published by the OECD. BEPS Action 5 has continued the work on harmful tax practices as the underlying policy concerns are as relevant today as they were in 1998. The concern is with the risk that preferential tax regimes and tax havens present […]

BEPS Action 4 – Interest Deductions

BEPS Action 4 makes recommendations on best practices in the design of rules to address base erosion and profit shifting (BEPS) using interest and other economically equivalent payments. The recommendation made in 2015 is to align interest deductions with taxable economic activity. The focus of Action 4 is on the use of debt to achieve […]

BEPS Action 3 – CFC Rules

BEPS Action 3 sets out recommendations for the design of Controlled Foreign Company (CFC) rules. These rules apply to entities with a controlling interest in a foreign subsidiary. The goal is to prevent the stripping of the taxable base from the country of residence by shifting income to a foreign subsidiary. These rules are not […]

BEPS Action 2 – Hybrids

Hybrid mismatch arrangements is a rather common practice to seek and use differences in the tax treatment of an entity or instrument in two or more tax jurisdictions to achieve double non-taxation, including long-term deferral. A hybrid mismatch arises when the tax treatment of the payments under a hybrid financial instrument or payment to or […]

Tag Archives: BEPS