Base Erosion and Profit Shifting Project and Developing Economies

Transcription

1 2015/FMP/WKSP1/021 Session: 6 Base Erosion and Profit Shifting Project and Developing Economies Submitted by: OECD Workshop on Fiscal Management Through Transparency and Reforms Bagac, Philippines 9-10 June 2015

2 APEC WORKSHOP SESSION 6 (PART 1) BEPS PROJECT AND DEVELOPING COUNTRIES APEC Workshop 9-10 June 2015

3 THE BEPS ACTION PLAN 2

4 The BEPS Project so far Feb 2013 Diagnosis: Addressing Base Erosion and Profit Shifting July Actions: Action Plan on Base Erosion and Profit Shifting Sep 2014 First Set of Deliverables: 3 Reports (Digital Economy, Multilateral Instrument) and 4 Instruments (Hybrids, Treaty Abuse, TP Intangibles, TP Documentation and CBC Template) Sep 2015 Second Set of Deliverables: Action 3 (CFC rules), Action 4 (Interest), Action 5 (HTP), Action 7 (PE Avoidance), Action 8-10 (TP), Action 11 (Economic Analyses), Action 12 (MDR), Action 14 (MAP) October 2015 Completion and Final Deliverables: Completion of BEPS Project and delivery of all supplemental reports to the G20 Finance Ministers 3

5 15 actions and 3 pillars Coherence Substance Transparency Hybrid Mismatch Arrangements (2) Interest Deductions (4) CFC Rules (3) Harmful Tax Practices (5) 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) Methodologies and Data Analysis (11) Disclosure Rules (12) TP Documentation (13) Dispute Resolution (14) Digital Economy (1) Multilateral Instrument (15) 4

6 Interest deductions Action 4 Discussion draft released in December 2014 Revised draft report will be circulated for the next Focus Group meeting in June 2015 Key developments: General principles underlying a best practice approach Fixed ratio rule based on EBITDA Group ratio carve-out based on interest/ebitda ratios Option to allow carry forward Outline of targeted rules that may be used to support the general rules and address remaining BEPS risks Best practice approach to groups in specific sectors: banking, insurance, funds, infrastructure and highly capitalised sectors 5

7 Treaty abuse Action 6 Report published in September 2014 A revised discussion draft was issued in May 2015 Key developments: the implementation of the minimum standard How should the minimum standard be reflected in OECD instruments and the MTC? Should countries be required to modify existing treaties in order to implement the standard? Should there be some form of monitoring of compliance with the minimum standard? 6

8 Avoidance of PE status Action 7 Latest discussion draft released in May 2015 Key developments: One proposal on PE avoidance strategies identified Focus on commissionaire arrangements and specific activity exemptions (changes considered to Art 5(5) and Art 5(4) of the OECD MTC) Profit attribution to be further developed after December

9 Country-by-country Reporting Action 13 Report released in September 2014 Guidance for the implementation of the CbC reporting issued in February 2015 Key developments: Timing of preparation and filing of the CbC report MNE groups that are required to file the CbC report The necessary conditions underpinning the obtaining and the use of the CbC report by administrations Framework for government-to-government mechanisms to exchange CbC reports 8

10 ENGAGING WITH PARTNER ECONOMIES 9

11 Strategy for a strengthened dialogue BEPS Project Engagement with partner economies 10

12 New Structured Dialogue Process Direct Participation in CFA and Working Parties 14 countries including Bangladesh, Philippines and Viet Nam) 2 Regional Tax Organisations - ATAF and CIAT Regional Network Meetings in spring and fall 2015 Asia-Pacific Latin America French speaking countries Africa Eurasia Ad hoc consultations and survey on toolkits (in collaboration with IMF, WBG, UN and regional tax organisations). 11

13 What was said at the Regional Meetings 1. Need to balance investment opportunities with domestic resource mobilisation 2. Need to ensure a level playing field between MNEs and domestic businesses 3. Need to engage all stakeholders in looking for solution to counter BEPS 4. Importance of developing capacity in Partner economies in order to implement BEPS. 5. Need to have access to better and useful tools to implement BEPS measures effectively. 6. Toolkits need to be practical and effective. 7. Dialogue on BEPS presents a resource challenge for many of the countries. 12

14 Next steps Next Regional Network Meetings October - November 2015 Asia- Pacific Region Collaboration with SGATAR Technical Committee on BEPS Toolkits: practical input from the Region 2015: Tax Incentives; TP comparability; 2016: Indirect transfer of assets; TP documentation; Treaty negotiation 2017: Base eroding payments; profit shifting through supply chains; assessing BEPS risks 13

15 The Crystal Ball: A post BEPS world BEPS fatigue and the new normal? Implementation (1): instruments, legislation, and guidelines Implementation (2): capacity building (toolkits, multilateral experience sharing and bilateral technical assistance) The next challenges: information, effective application, resourcing Building a global tax community: Continuation /scaling up partner countries engagement post BEPS? Role of Asia Pacific Region? 14

16 More information Questions Visit the BEPS & developing countries webpage: Read the BEPS reports: 15