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OECD Tax Talks
CENTRE FOR TAX POLICY AND ADMINISTRATION
12 July 2016
2:00pm – 3:00pm (CEST)
Ask questions and comment throughout the webcast
2
Join the discussion
Via email CTP.Contact@oecd.org
Via Twitter using #O...
Update on:
• The BEPS Project
• G20 Tax Symposium
• Tax Transparency
• … and what’s next
Presented by:
• Pascal Saint-Aman...
The Inclusive Framework on BEPS
Discussion drafts on transfer pricing, profit attribution
and interest deductibility
Lates...
• First meeting of the Inclusive Framework
– Opening the OECD’s Committee on Fiscal Affairs to committed countries
and jur...
• Key outcomes of the meeting
– Steering Group established
– Mandates for peer review of the 4 minimum standards and
monit...
1. Conforming Changes to Chapter IX of the Transfer Pricing
Guidelines (Actions 8-10)
• Invitation for public review publi...
2. Attribution of profits to PEs (Action 7)
3. Revised guidance on profit split method (Actions 8-10)
• Released: 4 July 2...
• Work mandated by report on BEPS Action 7
• Illustrate the attribution of profits to PEs
considering the outcomes under B...
• Examples on how to attribute profits to:
– Dependent agent PEs
– Fixed PEs to which the Article 5(4) exemptions do
not a...
• Most appropriate method should be applied
- No intention to expand or narrow scope of PS
• Two ways to split profits, wi...
Ongoing transfer pricing work
Hard to Value Intangibles
• Implementation: focus on when and how the HTVI approach
should a...
Discussion draft: Interest deductibility
• Action 4 Report mandated further detailed work on key
elements to assist countr...
Discussion draft: Interest deductibility
1. Calculation of
net third party
interest expense
2. Calculation
of group-
EBITD...
• OECD guidance released on:
– Transitional filing options for MNEs
(“Parent surrogate filing”)
– Application of CbC repor...
• Released standardised IT-format for the exchange on
tax rulings (ETR) between jurisdictions:
– ETR XML Schema, and
– rel...
17
Tax Rulings Compulsory Spontaneous
Exchange
1. Rulings related to preferential
regimes
2. Unilateral APAs and other TP ...
18
Country BCountry A
Country A
Competent Authority Country B
Competent
Authority
Agreement to exchange
information e.g. M...
• Discussion draft and public consultation on 7 July
– 33 written comments received
– Diverse group of participants from N...
20
G20 Tax Policy
Symposium
• 23 July 2016 in Chengdu, China
• Ministerial-level
• Two key tax policy topics:
– Tax policy for innovation-driven and i...
TAX TRANSPARENCY
22
Objective Criteria to identify non-cooperative jurisdictions
Publication of CRS Status Message XML Sch...
Three criteria, with benchmarks
1. Implementation of the Exchange of Information on Request Standard (EOIR): at least a
“l...
• Released standardised IT-format for providing structured feedback
on exchanged Common Reporting Standard information
– T...
WHAT’S NEXT?
25
• G20 Finance Ministers meeting in July and Leaders
Summit in September
• Upcoming discussion drafts & public consultation...
QUESTIONS?
27
Upcoming SlideShare
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OECD Tax Talks #2 - 12 July 2016


With a number of important recent and upcoming developments in the OECD's international tax work, we invite you to join the OECD's Centre for Tax Policy and Administration (CTPA) for the latest tax update. Topics include:
- The BEPS Project: Outcomes from the inaugural meeting of the Inclusive Framework on BEPS, including the latest discussion drafts and progress on implementation.
- The upcoming G20 Tax Policy Symposium.
- The months ahead: Our work programme, and how you can be involved.

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OECD Tax Talks #2 - 12 July 2016

  1. 1. OECD Tax Talks CENTRE FOR TAX POLICY AND ADMINISTRATION 12 July 2016 2:00pm – 3:00pm (CEST)
  2. 2. Ask questions and comment throughout the webcast 2 Join the discussion Via email CTP.Contact@oecd.org Via Twitter using #OECDTaxTalks
  3. 3. Update on: • The BEPS Project • G20 Tax Symposium • Tax Transparency • … and what’s next Presented by: • Pascal Saint-Amans, Director, Centre for Tax Policy and Administration • Mayra Lucas, Advisor, Transfer Pricing Unit • Melinda Brown, Advisor, Transfer Pricing Unit • Achim Pross, Head of International Co-operation and Tax Administration 3 Today’s topics and speakers
  4. 4. The Inclusive Framework on BEPS Discussion drafts on transfer pricing, profit attribution and interest deductibility Latest CBCR guidance Publication of schema for exchange of tax rulings Negotiations of the Multilateral Legal Instrument 4 BEPS
  5. 5. • First meeting of the Inclusive Framework – Opening the OECD’s Committee on Fiscal Affairs to committed countries and jurisdictions on BEPS issues – 84 members • All OECD and G20 economies • 38 new members, including over a dozen African countries. – 21 countries and jurisdictions participated as BEPS Invitees, including Jamaica, Malaysia, Mauritius, Panama, and the United Arab Emirates 5 OECD/G20 Inclusive Framework on BEPS Implementation
  6. 6. • Key outcomes of the meeting – Steering Group established – Mandates for peer review of the 4 minimum standards and monitoring implementation of the BEPS measures – Approval of discussion drafts Also, 5 more countries (Argentina, Curaçao, Georgia, Korea, Uruguay) signed the Multilateral Competent Authority Agreement for the automatic exchange of CbC reports— 44 signatories in total 6 Inclusive Framework
  7. 7. 1. Conforming Changes to Chapter IX of the Transfer Pricing Guidelines (Actions 8-10) • Invitation for public review published on 4 July 2016 • Review aimed only at identifying real or perceived inconsistencies with revised TPG and duplications (i.e. not a re-opening of any substantive issues) • Deadline for comments: 16 August 2016 7 New BEPS discussion drafts
  8. 8. 2. Attribution of profits to PEs (Action 7) 3. Revised guidance on profit split method (Actions 8-10) • Released: 4 July 2016 • Deadline: 5 September 2016 • Public consultation: 11-12 October 2016 4. Interest deductibility (Action 4) • Released: 11 July 2016 • Deadline: 16 August 2016 8 New BEPS discussion drafts
  9. 9. • Work mandated by report on BEPS Action 7 • Illustrate the attribution of profits to PEs considering the outcomes under BEPS Action 7 and BEPS Actions 8-10 9 Discussion draft: Attribution of profits to PEs
  10. 10. • Examples on how to attribute profits to: – Dependent agent PEs – Fixed PEs to which the Article 5(4) exemptions do not apply • Possible economic double taxation if Art. 7 and Art. 9 are not applied coherently 10 Discussion draft: Attribution of profits to PEs
  11. 11. • Most appropriate method should be applied - No intention to expand or narrow scope of PS • Two ways to split profits, with different risk outcomes. Transactional profit splits of: - actual profits - anticipated profits • When is PS likely to be the most appropriate method? - Unique and valuable contributions - Highly integrated operations -  sharing of economically significant risks? 11 Discussion draft: Transactional profit split method
  12. 12. Ongoing transfer pricing work Hard to Value Intangibles • Implementation: focus on when and how the HTVI approach should apply Low Value-adding Intra-group Services • Country positions to be announced Transfer pricing aspects of financial transactions • Scope is currently being defined • Economically relevant characteristics for determining arm’s length conditions for financial transactions 12
  13. 13. Discussion draft: Interest deductibility • Action 4 Report mandated further detailed work on key elements to assist countries in implementing the rule • The discussion draft does not propose changes to anything agreed in the Report • Group ratio rule allows entities to deduct interest up to the net interest/EBITDA ratio of worldwide group
  14. 14. Discussion draft: Interest deductibility 1. Calculation of net third party interest expense 2. Calculation of group- EBITDA 3. Dealing with the impact of losses Discussion draft recommends a consistent approach based on a group’s consolidated financial statements Some flexibility for countries to take into account domestic tax law or policy Sets out alternative approaches to balance the needs of groups and countries
  15. 15. • OECD guidance released on: – Transitional filing options for MNEs (“Parent surrogate filing”) – Application of CbC reporting to investment funds – Application of CbC reporting to partnerships – Impact of currency fluctuations on the agreed EUR 750 million filing threshold 15 Update: Country-by-Country Reporting
  16. 16. • Released standardised IT-format for the exchange on tax rulings (ETR) between jurisdictions: – ETR XML Schema, and – related User Guide • Help to ensure the swift and efficient implementation of the BEPS measures 16 Tax rulings exchange XML Schema
  17. 17. 17 Tax Rulings Compulsory Spontaneous Exchange 1. Rulings related to preferential regimes 2. Unilateral APAs and other TP rulings 3. Rulings given a unilateral downward adjustment 4. Permanent establishment (PE) rulings 5. Related party conduit rulings 6. Other rulings subsequently agreed to give rise to BEPS concerns 1. Countries of residence of related parties with a transaction covered by the ruling, or in the case of PE ruling country of head office/PE as case may be 2. Country of Immediate Parent Co 3. Country of Ultimate Parent Co Categories of rulings To be exchanged with
  18. 18. 18 Country BCountry A Country A Competent Authority Country B Competent Authority Agreement to exchange information e.g. MAC, DTC Tax administration rulings division 2. Prepares summary in agreed template including taxpayer details, related party details in country B and summary of issues covered by ruling 1. Issues ruling to taxpayer 3. Provides information to CA 4. Receives information and follows confidentiality safeguards per EOI agreement; disseminates to authorised personnel Tax administration risk assessment division 5. Reviews information for risk assessment and possible compliance action XML Schema developed Tax rulings exchange process
  19. 19. • Discussion draft and public consultation on 7 July – 33 written comments received – Diverse group of participants from NGOs and business community – Focus of input: • relationship between MLI and existing treaties, • ensuring consistent application and interpretation • development of a mandatory binding MAP arbitration provision • 4th inter-governmental negotiation to take place in September. 19 Multilateral Legal Instrument
  20. 20. 20 G20 Tax Policy Symposium
  21. 21. • 23 July 2016 in Chengdu, China • Ministerial-level • Two key tax policy topics: – Tax policy for innovation-driven and inclusive growth – Increasing tax certainty to promote trade and investment in a world where value creation is changing 21 G20 Tax Policy Symposium
  22. 22. TAX TRANSPARENCY 22 Objective Criteria to identify non-cooperative jurisdictions Publication of CRS Status Message XML Schema
  23. 23. Three criteria, with benchmarks 1. Implementation of the Exchange of Information on Request Standard (EOIR): at least a “largely compliant” rating 2. Implementation of the Automatic Exchange of Financial Account Information Standard (AEOI): committed to implement CRS and begin exchanges by 2018 at the latest. 3. Exchange network: Participation in the Multilateral Convention on Mutual Administrative Assistance in Tax Matters or a sufficiently broad exchange network that provides for EOIR and AEOI. Cooperative: meet the benchmarks of at least 2 criteria. Immediately non-cooperative: “Non-compliant” jurisdictions or those jurisdictions that are or were blocked in Phase 1 and have not yet received a rating. Who will it apply to: all countries and jurisdictions, except developing countries which do not have financial centres 23 Objective Criteria to identify non-cooperative jurisdictions
  24. 24. • Released standardised IT-format for providing structured feedback on exchanged Common Reporting Standard information – The CRS Status Message XML Schema – The related User Guide • First exchanges under the Common Reporting Standard scheduled for September 2017 24 Publication of Schema for feedback on CRS information
  25. 25. WHAT’S NEXT? 25
  26. 26. • G20 Finance Ministers meeting in July and Leaders Summit in September • Upcoming discussion drafts & public consultations • Next OECD Tax Talks? September 26 What’s next? 28 July Discussion draft Interest deductions in the banking and insurance sectors Week of 8 August Discussion draft Branch mismatch arrangements 11-12 October Public consultation Attribution of profits to permanent establishments and revised guidance on profit splits
  27. 27. QUESTIONS? 27

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