On February 23, 2016 the OECD issued a press release announcing that it agreed a new framework that would allow all interested countries and jurisdictions become part of an inclusive dialogue on an equal footing to directly shape the standard setting and monitoring processes on BEPS issues. On that same date the OECD also issued a flyer providing some high level information in this respect. This proposal for broadening participation in the OECD/G20 BEPS Project was endorsed by the G20 Finance Ministers at their meeting on February 26-27, 2016 in Shanghai, China.

Today I noticed that a document titled: “Background Brief – Inclusive Framework for BEPS Implementation” was published on the OECD’s BEPS website. There is no publication date mentioned with respect to this document. With respect to publication the document only mentions March 2016. Therefore I am not sure how long the document is already available on the OECD website. Still I believe the brief is interesting enough to shortly discuss since some of our readers like myself might not have noticed it yet.

 

In its press release of February 23, 2016 the OECD mentioned a.o. the following: “The framework’s mandate will focus on the review of implementation of the 4 BEPS minimum standards, in the areas of harmful tax practices, tax treaty abuse, Country-by-Country Reporting requirements for transfer pricing and improvements in cross-border tax dispute resolution.

 

In the same respect the flyer published on February 23, 2016 by the OECD mentioned a.o.: “Participants in this inclusive framework will take joint action to implement the BEPS Action items and will set additional standards. They will commit to implementing the BEPS package of minimum standards” and “The benefits of participating in the BEPS inclusive framework include: Implementing measures protecting your tax base, such as the development of provisions to avoid treaty abuse and provisions for Country-by-Country Reporting…”.

 

The Background Brief provides interesting information on several subjects. With respect to the implementation of the 4 BEPS minimum standards, in the areas of harmful tax practices, tax treaty abuse, Country-by-Country Reporting requirements for transfer pricing and improvements in cross-border tax dispute resolution, the OECD’s Background Brief from March 2016 mentions a.o. the following:

Four minimum standards were agreed, in particular to tackle issues in cases where no action by some countries would have created negative spill overs (including adverse impacts of competitiveness) on other countries. The minimum standards encompass the following:

1.     model provisions to prevent treaty abuse, including through treaty shopping that will impede the use of conduit companies in countries and jurisdictions with favourable tax treaties to channel investments and obtain reduced rates of taxation;

2.     standardised Country-by-Country Reporting that will give tax administrations a global picture of where MNE profits, tax and economic activities are reported, and the ability to use this information to assess transfer pricing and other BEPS risks, so they can focus audit resources where they will be most effective;

3.     a revitalised peer review process to address harmful tax practices, including patent boxes where they include harmful features, as well as a commitment to transparency through the mandatory spontaneous exchange of relevant information on taxpayer-specific rulings which, in the absence of information exchange, could give rise to BEPS concerns;

4.     an agreement to secure progress on dispute resolution, with the strong political commitment to the effective and timely resolution of disputes through the mutual agreement procedure (MAP).

 

Click here to be forwarded to the “Background Brief – Inclusive Framework for BEPS Implementation” as available on the OECD website, which will open in a new window.

 

 

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