IBFD Course Programme BEPS Country Implementation

IBFD Course Programme BEPS Country Implementation

Summary On 5 October 2015, the OECD published the final reports of its 15-point base erosion and profit shifting (BEPS) project. A bit more than a year later, on 25 November 2016, more than 100 countries agreed on the compromise text of the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (hereafter multilateral instrument or MLI) that is designed to transpose the BEPS amendments into more than 2000 double tax treaties. Prior to this, in May 2016, the OECD Council approved the changes to the OECD Transfer Pricing Guidelines (TPG). The two latter acts officially marked the beginning of the implementation phase of the BEPS project. This 2-day, intermediate-level course intends to give you not only an overview of the BEPS implications, but also a look at how countries, governmental bodies and international organizations implement BEPS into their domestic legal and tax systems, political frameworks and day-to-day operations. The course will kick off with a global update on the BEPS project and the outcome of each action point. Legislative examples, recently signed, BEPS-compliant tax treaties and case law on which BEPS has made an impact will be discussed to showcase the challenges taxpayers will face, as well as the wide range of anti-avoidance tools tax administrations have at their disposal as a result of BEPS. Subsequently, the course will pay significant attention to the MLI, including the list of signatories, the covered tax treaties, the alternatives texts, provisions concerned and the reservations made on its provisions. The modus operandi of the MLI as well as the legal and procedural problems it creates will also be examined. On the second day of the course, the focus will be steered towards transfer pricing (TP). After providing a summary of the most important TP implications ranging from the new, 6-step analytical framework of control, management and mitigation of risks, the new definition of intangibles, the role of DEMPE functions, the impact of BEPS on financing companies, the new provisions on services and commodity transactions as well as the improved documentation requirements (e.g. country-bycountry reporting (CbCR)) the course participants will have the opportunity to investigate how countries adopt the amendments to the OECD TPG into their domestic law and how the different implementation practices affect MNEs operating in multiple jurisdictions. The course will continue with a session on the latest developments in the European Union, where BEPS has propelled several important changes to the existing system of tax directives (Parent Subsidiary Directive and the Directive on Administrative Cooperation), has given rise to the new Anti-Tax Avoidance Directive (e.g. compulsory, domestic law exit tax, controlled foreign company (CFC), thin cap, hybrid and Principal Purpose Test provisions) and a proposal on a directive for mandatory, binding arbitration, has instigated changes to the current EU VAT system and has brought about amendments to the existing IP box regimes. How the myriad of measures will affect existing structures in the European Union, how they 2

fit into the constitutional and domestic tax systems of EU Member States and how they compare to the OECD BEPS package will be thoroughly looked at. Finally, to give course participants a full picture of the post-beps tax world, a separate session will be dedicated to unilateral measures adopted by selected countries (e.g. Australia, China, India, the United Kingdom, the United States) which relate to the BEPS initiative, explaining their relevance and the challenges and opportunities they create. Throughout the different sessions, special attention will be paid to implementation deadlines, legal challenges of potentially retroactive measures, transitory provisions and grandfathering clauses to help practitioners understand the procedural issues surrounding BEPS. This is an interactive course; therefore, participation is limited to a maximum of 32 participants. Prior to the course, participants will receive the course material via email in a digital format. Field of Study Taxes Who Should Attend? The course is suitable for practitioners in tax advisory firms, tax specialists in commerce and industry, and government officials. Course Level and Prerequisites This is an intermediate-level course. Participants will be expected to have a basic knowledge of the tax system of at least one country. 3

Day 1 08.30-09.00 Registration 09.00-09.20 Welcome and IBFD Overview 09.20-10.40 Global Update on BEPS Developments Update on the Final Reports of the BEPS project Action 1 Action 15 Summary: Outcome Areas on: coherence substance transparency Domestic law and treaty examples relevant to BEPS modifications Impact of BEPS on tax court decisions Risks and opportunities for taxpayers and tax administrations OECD developments post-beps peer reviews MLI CbCR 10.40-11.00 Break Refreshments 11.00-12.40 OECD Multilateral Instrument The role and legal status of the MLI The relationship between the MLI and double tax treaties Modus operandi of the MLI Summary of MLI provisions on: hybrid mismatches treaty abuse avoidance of permanent establishment status improving dispute resolution arbitration Reservations and alternative options Procedural rules, treaties covered, potential controversies, interpretation issues 12.40.- 14.00 Lunch 14.00-15.20 OECD Multilateral Instrument (continued) 15.20-15.40 Break Refreshments 4

15.40-17.00 Case Study This case study will give course participants an opportunity to discover and discuss the way in which BEPS affects their business operations and understand and address how the different domestic law implementations and the MLI could create potential challenges and disputes in the future. Day 2 09.00-10.40 Transfer Pricing Post-BEPS Summary of BEPS Actions 8-10 application of the new OECD Guidelines on Chapter I, risk analysis and comparability factors significant changes to the existing TPG on intangibles application of profit split methods Action 13 TP documentation and CbCR effects of post-beps TP methodology on supply chain analyses the role of funding and capital low value-added intra-group services examples and cases The relevance and the impact of the OECD TPG on domestic law How countries look at and follow the OECD TPG? 10.40-11.00 Break Refreshments 11.00-12.40 Transfer Pricing Post-BEPS (continued) 12.40-14.00 Lunch 14.00-15.20 Recent EU Anti-Tax Avoidance Developments BEPS from a European perspective OECD BEPS v. EU anti-avoidance agenda similarities and potential controversies impact on existing structures concerning EU Member States Implementation of: EU Anti-Avoidance Package Anti-Tax Avoidance Directive 5

recommendation on tax treaties revised Administrative Cooperation Directive communication on external strategy for effective taxation VAT Action Plan transparency initiatives, including CbCR and automatic exchange of tax rulings BEPS Actions 8-10 and the EU Joint Forum on Transfer Pricing EU Code of Conduct State aid decisions The re-launch of common consolidated corporate tax base Proposed EC Directive on Double Taxation Dispute Resolution Mechanisms in the European Union 15.20-15.40 Break Refreshments 15.40-17.00 Unilateral BEPS-Motivated Domestic Law Measures Examples of unilateral post-beps measures (e.g. Australia, India, United Kingdom, United States) source-country measures home-country measures intermediate-country measures Potential areas of controversy and dispute 6