The changing landscape of international tax
The OECD’s BEPS project
The OECD released its first report on base erosion and profit shifting on 12 February.
The report aims to establish the case for action by showing the extent of base erosion and profit shifting. The report analyses the principal causes of BEPS and identifies six key areas of concern, specifically:
- International mismatches (double non-taxation)
- OECD Model Treaty concepts in the field of digital delivery of goods and services
- Tax treatment of related-party debt, insurance and other intra-group financial arrangements
- Transfer pricing, in particular the shifting of risks and intangibles, the artificial splitting of assets between different legal owners, and transactions within a group that rarely would take place with third parties
- The effectiveness of domestic anti-avoidance measures (e.g. general anti-avoidance rules, and controlled foreign company and thin capitalisation regimes) to prevent treaty abuse
- The availability of harmful preferential regimes
Our article, published in Issue 2 of the 2013 edition of the Irish Tax Review journal, comments on the content of the report and in particular considers the six key areas of concern identified by the OECD and the potential approaches for addressing these concerns.