BEPS Action Plan

Action Plan

Description

Expected Outcome

Deadline

1. Address the tax challenges of the digital economy “Identify the main difficulties that the digital economy poses for the application of existing international tax rules and develop detailed options to address these difficulties, taking a holistic approach and considering both direct and indirect taxation.” Report identifying issues raised by the digital economy and possible actions to address them September 2014
 2. Neutralise the effects of hybrid mismatch arrangements “Develop model treaty provisions and recommendations regarding the design of domestic rules to neutralise the effect of hybrid instruments and entities”. Changes to Model Tax ConventionRecommendations on design of domestic rules September 2014
3. Strengthen CFC rules Develop recommendations regarding the design of controlled foreign company rules. This work will be coordinated with other work as necessary.” Recommendations on the design of domestic rules September 2015
4.  Limit base erosion via interest deductions and other financial payments “Develop recommendations regarding best practices in the design of rules to prevent base erosion through the use of interest expense…. and other financial payments…..transfer pricing guidance will also be developed regarding the pricing of related party financial transactions, including financial and performance guarantees, derivatives.” Recommendations on the design of domestic rulesChanges to Transfer Pricing Guidelines September 2015 & December 2015
5. Counter harmful tax practices more effectively, taking into account transparency and substance “Revamp the work on harmful tax practices with a priority on improving transparency, including compulsory spontaneous exchange on rulings related to preferential regimes, and on requiring substantial activity for any preferential regime.” Complete and finalise review of member country regimesStrategy to expand to non- OECD membersRevision of existing criteria September 2014, September 2015 & December 2015
6. Prevent treaty abuse “Develop model treaty provisions and recommendations regarding the design of domestic rules to prevent the granting of treaty benefits in inappropriate circumstances.” Changes to OECD Model Tax ConventionRecommendations on the design of domestic rules September 2014
7. Prevent the artificial avoidance of PE status “Develop changes to the definition of PE to prevent the artificial avoidance of PE status in relation to BEPS, including through the use of commissionaire arrangements and the specific activity exemptions.” Changes to OECD Model Tax Convention September 2015
8. Assure that transfer pricing outcomes are in line with value creation – Transfer Pricing “Develop rules to prevent BEPS by moving intangibles among group members.” Changes to the OECD Transfer Pricing Guidelines and possibly  to the OECD Model Tax Convention September 2014 & September 2015
9. Assure that transfer pricing outcomes are in line with value creation – Risks and Capital “Develop rules to prevent BEPS by transferring risks among, or allocating excessive capital to, group members.” Changes to the OECD Transfer Pricing Guidelines and possibly  to the OECD Model Tax Convention September 2015
10. Assure that transfer pricing outcomes are in line with value creation –other high risk transactions “Develop rules to prevent BEPS by engaging in transactions which would not, or would only very rarely, occur between third parties.” Changes to the OECD Transfer Pricing Guidelines and possibly to the OECD Model Tax Convention. September 2015
11.  Establish methodologies to collect and analyse data on BEPS and the actions to address it “Develop recommendations regarding indicators of the scale and economic impact of BEPS and ensure that tools are available to monitor and evaluate the effectiveness and economic impact of the actions taken to address BEPS on an ongoing basis.” Recommendations in relation to data to be collected and methodologies to analyse them September 2015
12. Require taxpayers to disclose their aggressive tax planning arrangements “Develop recommendations regarding the design of mandatory disclosure rules for aggressive or abusive transactions, arrangements, or structures, taking into consideration the administrative costs for tax administrations and businesses and drawing on experiences of the increasing number of countries that have such rules.” Recommendations relating to the design of domestic rules September 2015
13. Re-examine transfer pricing documentation “Develop rules regarding transfer pricing documentation to enhance transparency for tax administration, taking into consideration the compliance costs for business. The rules to be developed will include a requirement that MNE’s provide all relevant governments with needed information on their global allocation of the income, economic activity and taxes paid among countries according to a common template.” Changes to OECD Transfer Pricing Guidelines and recommendations relating to the design of domestic rules September 2014
14. Make dispute resolution mechanisms more effective “Develop solutions to address obstacles that prevent countries from solving treaty-related disputes under MAP, including the absence of arbitration provisions in most treaties and the fact that access to MAP and arbitration may be denied in certain cases.” Changes to OECD Model Tax Convention September 2015
15. Develop a multilateral instrument Analyse the tax and public international law issues related to the development of a multilateral instrument to enable jurisdictions that wish to do so to implement measures developed in the course of the work on BEPS and amend bilateral tax treaties.   Report identifying the relevant tax and public international law issuesDevelop a multilateral instrument September 2014