Base Erosion and Profit Shifting – The new OECD initiative and how it will affect you

The newly introduced Base erosion and profit shifting actions (BEPS for short) refers to tax avoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations. Over 100 countries and jurisdictions are collaborating to implement the BEPS measures and tackle BEPS.

BEPS will affect almost all entrepreneurs and businesses involved in cross-border activities. BEPS is divided into so-called actions covering the following areas:

  • THE DIGITAL ECONOMY
  • PERMANENT ESTABLISHMENT STATUS
  • HYBRIDS
  • TRANSFER PRICING
  • CFC RULES
  • BEPS DATA ANALYSIS
  • INTEREST DEDUCTIONS
  • DISCLOSURE OF AGGRESSIVE TAX PLANNING
  • HARMFUL TAX PRACTICES
  • TRANSFER PRICING DOCUMENTATION
  • TREATY ABUSE

On the OCED website, you will find more information on the actions.

http://www.oecd.org/tax/beps/beps-actions.htm

If you are operating an international business or if you have your assets in on- or offshore holding companies, you are welcome to contacts us to see how you will be affected and what actions you must take to comply with the new framework.