Countering Harmful Tax Practices
On 5 October 2015, ahead of the G20 Finance Ministers’ meeting on 8 October, the OECD Secretariat published thirteen papers and an Explanatory Statement outlining consensus Actions under the Base Erosion and Profit Shifting (‘BEPS’) Project. These papers include and consolidate the first seven reports presented to and welcomed by the G20 Leaders at the Brisbane Summit in 2014. The output under each of the BEPS Actions are intended to form a comprehensive and cohesive approach to the international tax framework, including domestic law recommendations and international principles under the OECD Model Tax Treaty and transfer pricing guidelines.
As part of the 2015 output, the OECD published a final report in relation to “Countering Harmful Tax Practices More Effectively, Taking Into Account Transparency and Substance” (Action 5). The report establishes minimum standards in respect of reviewing and establishing certain preferential tax practices, and introduces a framework for the compulsory exchange of tax rulings between taxing authorities. The report builds on the proposals put forward in the G20/OECD’s discussion drafts from late 2014.
The OECD has previously identified that Australia has no harmful tax practices, and the Australian Taxation office (ATO) has already commenced the exchange of the relevant tax rulings.