1. OECD/G20 BEPS Project
The Final Reports

2. 1869
Globalisation

3. International Tax Rules
2010
1890
1869
1980
2013
1950
1920
Profit
Shifting
Base Erosion
Tax Base
HORS SERVICE
International Tax Rules

4. July 2013
October 2015
BEPS Action Plan

5. Action Items Coher ence Substance Transparency Digital Economy (1)
Hybrid Mismatch Arrangements (2)
Harmful Tax Practices (5)
Interest Deductions (4)
CFC Rules (3)
Substance
Preventing Tax Treaty Abuse (6)
Avoidance of PE Status (7)
TP Aspects of Intangibles (8)
TP/Risk and Capital (9)
TP/High Risk Transactions (10)
Transparency
Methodologies and Data Analysis (11)
Disclosure Rules (12)
TP Documentation (13)
Dispute Resolution (14)
Digital Economy (1)
Multilateral Instrument (15)
Action Items

6. What’s in the BEPS package?
Minimum standards
Reinforced international standards on tax treaties and transfer pricing
Common approaches and best practices for domestic law measures
Analytical reports with recommendations (digital economy and multilateral instrument)
Detailed report on measuring BEPS

7. International Consensus

8. % Key data on BEPS Fiscal and economic effects Net FDI to GDP ratios
Global annual CIT revenue
Concentration of investments
Net FDI to GDP ratios
have increased sharply
Loss of 4-10% (USD bn)
MNE effective tax rates
Better data is needed
To assess the effects of BEPS on shifting real economic activity
To perform statistical analysis based on Country-by- country reports
To update periodic Corporate Tax Statistics %
4% – 8.5% lower
ETR than similar domestic firms
Key data on BEPS

9. What is the impact on beps?

10. Expected impact BEPS in a nutshell on BEPS HQ Parent Co
Ineffective/No CFC Rules
Maximise Deductions
Minimise Assets/Risks
Ultimate Residence Country
(High Tax)
Parent Co
Low Tax Intermediate
Country
High Tax Intermediate Country
Intermediate
Co 2
Intermediate Co 1
Maximise Assets/Risks
Hybrid Mismatch
Preferential Regime
Maximise Deductions
Market or Production Country
(High Tax)
Avoid Taxable Presence or
Minimise Assets/Risks
Local Activity
Low or no
Withholding tax

11. Compulsory spontaneous exchange of information on rulings
BEPS in a nutshell
Expected impact
on BEPS
Ineffective/No CFC Rules
Maximise Deductions
Minimise Assets/Risks
Action 3
Ultimate Residence Country
(High Tax)
Parent Co
Action 4
Action 8-10
Address techniques used to avoid the PE status, e.g. by replacing a distributor with a commissionnaire arrangement; by artificially fragmenting business activities to take advantage of exceptions that were initially adopted to prevent the taxation of mere preparatory or auxiliary activities; and/or by splitting-up construction contracts
Common approach to introduce coordination tools. Combination of primary and defensive rules. Ordering rule that avoids double taxation while preventing double non-taxation
Limit interest deductibility: Common approach on net interest deductions limited to a percentage (between 10%-30%) of EBITDA plus optional group wide ratio
Align substance with value creation through revised/new guidance for applying the ALP: delineation of actual transaction, risk allocation, intangibles including HTVI, CCA, commodity transactions and services
Include income creating BEPS concerns in the definition of CFC income, e.g. income from digital sales
Address treaty abuse through a minimum standards on treaty shopping (i.e. LOB and/or PPT) and other anti-abuse clauses
Nexus approach uses expenditure on R&D as a Proxy for Activity in IP regimes.
Compulsory spontaneous exchange of information on rulings
Low Tax Intermediate
Country
High Tax Intermediate Country
Intermediate
Co 2
Intermediate Co 1
Action 8-10
Maximise Assets/Risks
Action 13
Hybrid Mismatch
Preferential Regime
Maximise Deductions
Action 2
Action 5
Market or Production Country
(High Tax)
Avoid Taxable Presence or
Minimise Assets/Risks
Local Activity
Action 4
Action 7
Low or no
Withholding tax
Action 6
Action 8-10

12. Country-by-Country Reporting
Exchange of
rulings
FHTP
MAC
Membership
Mandatory disclosure
Country-by-Country Reporting
Transparency

13. Dispute Resolution

14. A large group of countries
Minimum Standard
Peer review
Minimum standard + +
Supplementary commitment
Mandatory binding
MAP arbitration
A large group of countries
>90% of MAP
cases
Dispute Resolution

15. Holistic Approach Monitoring Legal certainty and dispute resolution
Transparency
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New and revised rules
Holistic Approach Q

16. What’s next?

17. Inclusiveness G20 Leaders 16 November 2015
“We, therefore, strongly urge the timely implementation of the project and encourage all countries and jurisdictions, including developing ones, to participate. To monitor the implementation of the BEPS project globally, we call on the OECD to develop an inclusive framework by early 2016 with the involvement of interested non-G20 countries and jurisdictions which commit to implement the BEPS project, including developing economies, on an equal footing.”
Inclusiveness Q

18. Website: www. oecd. org/tax/beps. htm Contact: CTP. BEPS@oecd
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