The OECD and G20 have agreed three key elements towards the implementation of BEPS measures on tax avoidance by multinationals:
The OECD and G20 have agreed three key elements towards the implementation of BEPS measures on tax avoidance by multinationals:
the formation of a negotiating group on the multilateral instrument for updating tax treaties, which will hold its first OECD hosted meeting by July 2015 with an aim to conclude drafting by December 2016;
new guidance on country by country reporting and a related government to government exchange mechanism to start from 2017; and
proposals for the ‘nexus approach’ to the substantial activity test for patent box regimes.
These were discussed at a G20 finance ministers meeting on 9–10 February in Istanbul, Turkey. The implementation of the BEPS action plan, according to the OECD, will ‘require modifications to the existing network of more than 3,000 bilateral tax treaties worldwide. The planned multilateral instrument will offer countries a single tool for updating their networks of tax treaties in a rapid and consistent manner.’
The new guidance outlines the requirement for multinationals with a turnover above €750m to implement country by country reporting in their countries of residence from 2016, with the first country by country reports being exchanged by tax administrations in 2017.
‘These are important steps forward, which demonstrate that progress is being made toward a fairer international tax system,’ OECD Secretary-General Angel Gurría said. ‘These decisions signal the unwavering commitment of the international community to put an end to base erosion and profit shifting, in line with the ambitious timeline endorsed by G20 leaders.’
The OECD and G20 have agreed three key elements towards the implementation of BEPS measures on tax avoidance by multinationals:
The OECD and G20 have agreed three key elements towards the implementation of BEPS measures on tax avoidance by multinationals:
the formation of a negotiating group on the multilateral instrument for updating tax treaties, which will hold its first OECD hosted meeting by July 2015 with an aim to conclude drafting by December 2016;
new guidance on country by country reporting and a related government to government exchange mechanism to start from 2017; and
proposals for the ‘nexus approach’ to the substantial activity test for patent box regimes.
These were discussed at a G20 finance ministers meeting on 9–10 February in Istanbul, Turkey. The implementation of the BEPS action plan, according to the OECD, will ‘require modifications to the existing network of more than 3,000 bilateral tax treaties worldwide. The planned multilateral instrument will offer countries a single tool for updating their networks of tax treaties in a rapid and consistent manner.’
The new guidance outlines the requirement for multinationals with a turnover above €750m to implement country by country reporting in their countries of residence from 2016, with the first country by country reports being exchanged by tax administrations in 2017.
‘These are important steps forward, which demonstrate that progress is being made toward a fairer international tax system,’ OECD Secretary-General Angel Gurría said. ‘These decisions signal the unwavering commitment of the international community to put an end to base erosion and profit shifting, in line with the ambitious timeline endorsed by G20 leaders.’
