OECD Updates G-20 On BEPS Progress
The Organisation for Economic Co-operation and Development (OECD) has briefed leaders of the Group of Twenty (G-20) nations on recent advances towards the conclusion of its base erosion and profit shifting project, which it says may be completed ahead of schedule.
The OECD presented a report to the G-20 Finance Ministers and Central Bank Governors’ meeting on February 10, 2015, in Istanbul, Turkey. The OECD noted “significant progress in the implementation of the 2014 [BEPS] deliverables,” while stating that “important headway has already been made on some of the remaining components of the full package to be delivered by September.”
Releasing the report, OECD Secretary-General Angel Gurría said: “The work is being undertaken on an ambitious timetable and will require the hard work of your teams. But, if thanks to your political leadership, we continue progressing at the same pace, I will be in a position to present you the whole 2015 BEPS package at your meeting in Lima, in early October. It will then be available for endorsement by your leaders, in Antalya, in November. This will be, undoubtedly, a major deliverable of the G-20 this year!”
In particular, the OECD’s report confirms an international agreement on:
The application of key country-by-country reporting requirements through a government-to-government exchange mechanism;
The application of the modified nexus approach to phase out harmful intellectual property regimes; and
A framework for negotiations towards a multilateral instrument to update provisions in the more than 3,000 tax treaties negotiated worldwide.
The report also notes increased participation by developing countries in the BEPS project. A total of 62 countries are working together on the proposals, including 14 developing countries representing a regional balance of interested lower income economies, which are to join the decision-making and technical working group meetings, the OECD said.
The report states that the “OECD is working with its partners in other international and regional organizations to support developing countries to secure a stronger tax framework that can sustainably finance domestic development needs.”
“This is a historic move and is a decisive response to your call to ensure that developing countries are more deeply engaged in the reform of the international tax rules, with their needs to be reflected in the BEPS outcomes,” Gurría told the G-20.
