The initial Action 7 discussion draft on PE’s has been replaced by a revised discussion draft, which largely focusses on expanding the scope of the dependent agent rule and narrowing the scope of the “specific activity” PE exemptions as mentioned under the current Article 5(4) MC. Furthermore, the revised discussion draft proposes an anti-fragmentation rule intended to prevent abuse of PE rules by dividing activities and assigning them to associated enterprises.
On 6 February 2015 the OECD published three papers addressing different developments in the BEPS Action plan:
Action 5: Agreement on modified nexus approach for IP regimes
Action 13: Guidance on the implementation of transfer pricing documentation and country-by-country reporting
Action 15: A mandate for the development of multilateral instrument on tax treaty measures to tackle BEPS
The OECD will present these developments during the G-20 Ministers of Finance meeting of 9-11 February 2015.
In accordance with the base erosion and profit-shifting (BEPS) project, the OECD on September 16 released its first recommendations to G-20 finance ministers and central bank governors for a coordinated international approach to combat tax avoidance by multinational enterprises. The reports address seven of the 15 items listed in the BEPS action plan.
In between 16 and 19 December the OECD published the following public discussion drafts on specific issues under these action plans:
Action 4: Limitations on interest deductions
Action 8-10: Transfer pricing for risk re-characterization and special measures
Action 10: Profit split method for transfer pricing in the context of global value chains
Action 10: Transfer pricing for commodity transactions
Action 14: Improving dispute resolutions
On 29 October 2014, 51 countries endorsed the new G-20/OECD standard for automatic exchange of financial account information in tax matters by signing a multilateral competent authority agreement, based on the OECD’s “Convention on Mutual Administrative Assistance in Tax Matters”.
The signing of the agreement activates the automatic exchange of information, with which the subsequent bilateral exchanges will come into effect between the respective signatories. It is expected that the first automatic exchange of information will take place by early adopters as per September 2017 and the others are expected to follow in 2018.
The Organisation for Economic Co-operation and Development (OECD) has published Public Discussion Drafts on the topics of treaty abuse (14 March), hybrid mismatch arrangements (19 March) and the tax challenges of the digital economy (24 March 2014) in addition to the earlier publication on transfer pricing documentation (30 January). These documents are meant to help governments counter Base Erosion and Profit Shifting, a form of (aggressive) tax planning.
