Keep Calm and Comment on BEPS

Keep Calm and Comment on BEPS

Mon 22 Dec 2014

I am wondering whether it is only me who is facing hundreds of pages of discussion documents inviting stakeholders’ input or are you also sharing the same experience while you are drinking your strong cup of coffee today!

It is undeniable that the OECD has done excellent work in the last 55 days and released several discussion drafts. Moreover, it is also true that the OECD BEPS Action Plan marked its first turning point in my life and, as it was announced, in the history of international co-operation on taxation. So what can I do today? Maybe just keep calm and carry on…. and look at what happened in the last 55 days…

Action 7

On 31 October 2014, the OECD invited public comments on Action 7 (Prevent the Artificial Avoidance of PE Status)/ a discussion draft which includes the preliminary results of the work carried on with respect to issues related to the artificial avoidance of PE status and includes proposals for changes to the definition of permanent establishment found in the OECD Model Tax Convention.  For more information see our blog post

Action 10

On 3 November 2014, a discussion draft of proposed modifications to Chapter VII of the Transfer Pricing Guidelines relating to low value-adding intra-group services was released for comment by interested parties today. Action 10 of the Action Plan on Base Erosion and Profit Shifting (BEPS) directs the OECD to develop transfer pricing rules to provide protection against common types of base eroding payments, such as management fees and head office expenses. For more information see our blog post

Action 6

On 21 November 2014, the OECD invited public comments on a discussion draft which deals with follow-up work mandated by the Report on Action 6 (“Prevent the granting of treaty benefits in inappropriate circumstances”) of the BEPS Action Plan. For more information see our blog post

Action 10

On 16 December 2014, two discussion drafts were released on Action 10. One of the discussion draft deals with work in relation to Action 10 (“Assure that transfer pricing outcomes are in line with value creation” in relation to “other high risk transactions”) and the second discussion draft focuses on the use of profit splits in the context of global value chains as part of the work on BEPS Action 10. For more information see the blog post

OECD International VAT/GST Guidelines

On 18 December 2014, public comments are now invited on two new draft elements of International VAT/GST Guidelines.  The Committee on Fiscal Affairs (CFA) is developing International VAT/GST Guidelines (Guidelines) to address issues of double taxation and unintended non-taxation resulting from inconsistencies in the application of VAT to international trade. These discussion drafts relate to (i) the place of taxation of business-to-consumer supplies of services and intangibles (B2C Guidelines) and (ii) provisions to support the application of the Guidelines in practice (Supporting provisions). The discussion draft of the B2C Guidelines notably provides a response to the key conclusion on VAT/GST formulated in the Report on Tax Challenges of the Digital Economy, which was prepared in the context of the work on Action 1 of the BEPS Action Plan (digital economy). This Report concluded that “The collection of VAT in business-to-consumer (B2C) transactions is a pressing issue that needs to be addressed urgently to protect tax revenue and to level the playing field between foreign suppliers relative to domestic suppliers. Work in this area by the Working Party No. 9 of the OECD CFA shall be completed by the end of 2015, with the Associates in the BEPS Project participating on an equal footing with the OECD member countries”.

Action 4

On 18 December 2014, the OECD invited stakeholders’ input on Action 4 (Interest deductions and other financial payments)/on a discussion draft. For more information visit our blog.

Action 14

On 18 December 2014, public comments are invited on a discussion draft which deals with the work on Action 14 (“Make dispute resolution mechanisms more effective“) of the BEPS Action Plan by OECD. For more information visit the website

Action 8, 9 and 10

On 19 December 2014, OECD released a discussion draft on revisions to Chapter I of the Transfer Pricing Guidelines (Including risk, recharacterisation and special measures) and public comments are invited on this discussion draft which deals with work in relation to Actions 8, 9, and 10 (“Assure that transfer pricing outcomes are in line with value creation”) of the Action Plan on Base Erosion and Profit Shifting (BEPS). For more information visit our blog.

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