Author: Emil Brincker (DLA Cliffe Dekker Hofmeyr) The Organisation for Economic Co-operation and Development (OECD) released a public discussion draft (DD) pertaining to the Base Erosion and Profit Shifting (BEPS) Action Plan 10 on 3 November 2014. The DD intends to reduce the scope for erosion of the tax base by means of the charging of excessive management fees and head office expenses.
Category: OECD – BEPS Project
Proposed modifications to the transfer pricing guidelines relating to low Value-adding intra-group services
The Organisation for Economic Co-operation and Development (OECD) released a public discussion draft (DD) pertaining to the Base Erosion and Profit Shifting (BEPS) Action Plan 10 on 3 November 2014. The DD intends to reduce the scope for erosion of the tax base by means of the charging of excessive management fees and head office expenses. In establishing an approach, reference is made to so-called low value-adding intra-group services where a simplified approach can be adopted. In such instance the mark-up selected by the taxpayer cannot be less than 2% of the cost nor should it be greater than 5% thereof.
OECD publishes first seven reports in its Base Erosion Profit Shifting (BEPS) project
Authors: David Gubbay, Ben Roberts , Adam Craggs and Nigel Brook – RPC Global On 16 September 2014 the Organisation for Economic Co-operation and Development (OECD) published its first set of reports and recommendations on the BEPS project. Seven of the 15 areas of the BEPS action plan are covered, addressing: the digital economy hybrid mismatches treaty abuse transfer pricing documentation and country-by-country reporting transfer pricing and intangibles harmful tax practices a possible multilateral instrument to implement BEPS
The future of the international tax landscape
The Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Sharing (BEPS) Action Plan, approved by the OECD Committee of Fiscal Affairs (CFA) in June 2013 and endorsed by the G20 Heads of Government in September 2013, was formulated to combat international tax avoidance by multinational enterprises (MNEs) through artificially shifting profits to low tax jurisdictions and eroding the tax bases of their primary high tax jurisdictions of operation. The objective of the BEPS Action Plan is to secure government revenues by ensuring that profits are taxed in the jurisdiction where the economic activities generating such profits are performed and where value is created.
Objective of the BEPS Action Plan
Author: Lisa Brunton The Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Sharing (BEPS) Action Plan, approved by the OECD Committee of Fiscal Affairs (CFA) in June 2013 and endorsed by the G20 heads of government in September 2013, was formulated to combat international tax avoidance by multinational enterprises (MNEs) through artificially shifting profits to low tax jurisdictions and eroding the tax bases of their primary high tax jurisdictions of operation. The objective of the BEPS Action Plan is to secure government revenues by ensuring that profits are taxed in the jurisdiction where the economic activities generating such profits are performed and where value is created.
BEPS: the OECD releases the first round of recommendations that are intended to bring about the most significant reform of the international tax system since the 1950s
The Base Erosion and Profit Shifting (BEPS) Project is high on the agenda of the South African Government. Senior government officials, including Deputy President Cyril Ramaphosa, political parties and senior South African Revenue Service (SARS) officials have all publically indicated that BEPS remains a matter of concern. In response, the Davis Tax Review Committee has been tasked to evaluate the South African tax system against internationally accepted tax practices and specifically the OECD’s BEPS project. The committee is expected to produce a report later this year.
SA expected to continue its support of OECD Action Plan to address BEPS, says PwC Tax
In June 2012, the G20 leaders explicitly referred to “the need to prevent base erosion and profit shifting” (“BEPS”) in their meeting’s final declaration. In February 2013 the Organisation for Economic Cooperation and Development (OECD) issued a progress report ahead of that month’s G20 meeting and in July 2013 released its comprehensive Action Plan to address BEPS, containing 15 separate actions and work streams. The BEPS project marks the most significant change to international tax in decades and the fact that the first set of 7 deliverables have been issued by the OECD on time, as promised, in September 2014, is reflective of the global political consensus that is driving the momentum for change in the way international transactions are taxed.
PART B – OECD RELEASES FIRST PROPOSALS FOR FIGHT AGAINST TAX AVOIDANCE BY MULTINATIONALS
In Part A of this article we provided an overview of the Base Erosion and Profit Shifting (‘BEPS’) Action Plan and listed the 7 action points which were released by the OECD on 16 September 2014. In this second part of the article we provide an overview of the 7 action points. Action 1 of the BEPS Action Plan deals with the tax challenges of the digital economy. Consensus has been reached that the digital economy cannot be ring-fenced for tax purposes. The proposal includes a detailed analysis of the digital economy, business models, key features and resultant tax challenges of the digital economy. It was concluded that the collection of VAT in business-
PART A – OECD RELEASES FIRST PROPOSALS FOR FIGHT AGAINST TAX AVOIDANCE BY MULTINATIONALS
Author: BDO South Africa The Base Erosion and Profit Shifting (‘BEPS’) Action Plan originated from a need to address aggressive tax planning. The release by the OECD of the first 7 proposals of the 15-point Action Plan on 16 September 2014 is considered to be a milestone in the attempts to prevent the artificial shifting of profits through inter-company charges, the transfer of patent licensing rights and similar practices.
The OECD/G20 Base Erosion and profit shifting project leaders shed light on the future of the international tax landscape
The Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Sharing (BEPS) Action Plan, approved by the OECD Committee of Fiscal Affairs (CFA) in June 2013 and endorsed by the G20 Heads of Government in September 2013, was formulated to combat international tax avoidance by multinational enterprises (MNEs) through artificially shifting profits to low tax jurisdictions and eroding the tax bases of their primary high tax jurisdictions of operation. The objective of the BEPS Action Plan is to secure government revenues by ensuring that profits are taxed in the jurisdiction where the economic activities generating such profits are performed and where value is created.