Global base erosion rules likely to be finalised by end 2015NEW DELHI:
The global base erosion and profit shifting (BEPS) rules, aimed at collecting a fair share of taxes from multinationals operating in different tax jurisdictions, are likely to be finalised by December 2015, a senior finance ministry official today said.
“Work on BEPS is moving very fast. If things go on track, I think by December 2015, one would end up with set of rules, set of principles which will have acceptance all over the world,” Joint Secretary in the Ministry of Finance Akhilesh Ranjan today said at an event organised by industry body CII.
The BEPS is being deliberated by the G20 nations and some forward movement is expected at forthcoming summit at Brisbane, he said.
“Businesses should gear up, prepare themselves for the changes in the tax legislation, and government is equally open to consider views of the industry,” Ranjan added.
Referring to skepticism of the industry on BEPS, he further said: “We must understand where the world is moving, and not just India, the rules are important for multi-jurisdictional transactions of both domestic and international companies. It consists of a set of rules that would be acceptable worldwide”.
Ranjan also asked companies to be prepared to deal with new rules on transfer pricing documentation in the wake of new global tax practices coming into force in the coming years.
“In India, we are going to start formulating new rules on transfer pricing documention by mid 2015.It is not something 2-3 years away, it’s right now. It is something now businesses must be prepared for,” he added.
Multinational companies use a wide range of cross border tax planning techniques that result in little or tax liability and such results are referred to as ‘Base Erosion and Profit Shifting’.
India has been at the forefront in raising the issues concerning tax avoidance and automatic exchange of information with a view to curbing tax evasion.
The G20 in 2013 had unanimously agreed to a 15-point action plan to check BEPS.
The G20 countries include Argentina, Australia, Brazil, Canada, China, France, Germany, India, Indonesia, Italy, Japan, Republic of Korea, Mexico, Russian Federation, Saudi Arabia, South Africa, Turkey, United Kingdom, United States–and the European Union.
