On 5 October 2015, the OECD published the final reports of the OECD/G20 Base Erosion and Profit Shifting ("BEPS") project, which consist of a package of measures for a co-ordinated international approach to reform the international tax system. This package will be discussed by the G20 ministers of finance on 8 October 2015. The combination of proposed anti-abuse rules and increased transparency will have significant implications for (groups of) companies operating in multiple jurisdictions.
General comments
The final BEPS package includes and consolidates the final 2014 deliverables of the OECD BEPS Action Plan that identified 15 action points (the "Actions"). Although the final BEPS package is intended to be comprehensive, the level of proposed commitment varies per proposed measure. The OECD/G20 member states commit to consistent implementation in the areas of preventing tax treaty shopping, Country-by-Country Reporting, combatting harmful tax practices and improving dispute resolution, whereas in other areas, such as hybrid mismatch arrangements, CFC and interest deductibility, they have agreed on a "softer" general tax policy direction.
The OECD identifies various next steps, including implementation of the proposed measures, monitoring this implementation and the involvement of developing countries. The OECD emphasizes the importance of a consistent and coherent implementation of BEPS measures that require changes to domestic laws. Furthermore, technical work on certain Actions will only be completed in 2016 and 2017. Moreover, the OECD/G20 countries intend to develop a framework for extending the implementation of BEPS measures to non-OECD and non-G20 countries. It is still difficult to predict whether and to what extent countries will accept harmonisation of international tax standards, in particular with regard to the Actions that have not resulted in minimum standards. Fear for loss of sovereignty and the competition for capital between countries will certainly play a role in the further development of the proposed measures.
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