Hans Röll

Phone: +39 (0471) 194 32 00
Fax: +39 (04 71) 194 32 20

Simon Gruber

Phone: +39 (04 71) 19 43– 200
Fax: +39 (04 71) 19 43– 220

On July 23-24, 2016, the Organization for Economic Co-operation and Development (OECD) presented a report to the finance ministers of the G20 countries in the occasion of their meeting in Chengdu, China. The presented report contained, amongst others, an update on the status quo of the Base Erosion and Profit Shifting (BEPS) project as well as a track record of the progresses that have been made in the area of tax transparency.
A more inclusive approach to tackling BEPS was implemented subsequently to the G20 Meeting in Antalya in 2015 and the chosen road proved to be successful: to date there are 85 OECD member countries that joined the BEPS Project and further 19 countries that ”are likely to join” by year-end.
The practical implications of the BEPS project are going to have an impact on businesses in the near future as the implementation of the BEPS package is already underway. In June 2016, the OECD issued further guidance on the Country-by-Country (CbC) Reporting that is part of Action 13 of the BEPS package. To date, over 50 countries have taken concrete steps to implement CbC Reporting as a risk assessment tool into their national legislations. Next to that, tax treaty-related BEPS Actions are being incorporated in the Multilateral Instrument (MLI, Action 15) on BEPS implementation, which 96 countries are currently negotiating. Once established, the MLI will allow countries to meet the BEPS minimum standard aiming at putting an end to treaty shopping as described in Action 6. The MLI will allow countries to address the issues of hybrid mismatches, the updated definition of the ”permanent establishment” concept and other forms of treaty abuses. A further aim of the MLI is the improvement of dispute resolution processes. It is expected by the OECD that, given the breadth of participating countries (96), more than 2,000 bilateral treaties could be amended if these countries sign the Convention once the instrument is finalized.
The high participation rates and the rapid implementation of the measures show that the G20/OECD BEPS Project and the related topics of preventing tax evasion and increasing tax transparency remain a priority for tax policy-makers and tax administrations around the globe.