It is a report on Regional Meeting on BEPS Project held in Seoul,Korea

1. REPORT
ON
ASIA-PACIFIC REGIONAL NETWORK ON BEPS PROJECT
(12-13 FEBRUARY 2015)
Submitted By:
MD.MAHMDUR RAHMAN
DIRECTOR
BCS (TAX) ACADEMY
NATIONAL BOARD OF REVENUE,
BANGLADESH

2. THE MEETING:
The Regional Network Meeting was held in Seoul, Korea, on 12-13 February 2015 hosted by
the Korean Policy Centre (Tax Programme) and focused on the key priority areas identified by
the Region at the regional consultation on BEPS that took place in sound in February 2014.
54 Participants from 22 economies in the Asia – Pacific Region, as well as representatives from
regional and international originations, including the Asian Development Bank (ADB), the
International Monetary Fund (IMF) and the Study Group on Asian Tax Administration and
Research (SGATAR) and US Agency for International Development (USAID).
Representatives of international and local business, and civil society were present in two
plenary sessions and shared their perspectives with tax officials.

3. Wednesday 11 February 2015
19:00 Welcome Reception with buffet dinner (Lotte Hotel World)
DAY 1
Thursday 12 February 2015
Time Format Session
9:00-9:30 Government
and I.O.s
Welcome / Opening / Objectives of the Meeting
Opening remarks by Mr. Chang-Yong MOON, Deputy Minister,
Ministry of Strategy and Finance, Korea
Co-chairs: Yoonjin Kang [Korea]
John Hutagaol [Indonesia]
9:30-
11:00
Government
and I.O.s
1. BEPS and Developing Countries
1) Introduction by the OECD secretariat
2) ‘Tour de table’ where all participants representing their governments
will be asked to present their views
11:00-
11:30
Coffee Break – Group Picture
11:30-
12:30
Government
and I.O.s
2. BEPS 2014deliverables and next steps
1) Introduction by the OECD secretariat
2) Discussions
12:30-
13:30
Lunch
13:30-
14:30
Government
and I.O.s
3. BEPS 2015 Deliverables and discussion drafts
1) Introduction by the OECD secretariat
2) Discussions
14:30-
16:00
Government
and I.O.s
4. In-depth discussions on issues of particular relevance for the
Region (part I)

4. Time Format Session
1) Introduction by the OECD secretariat
2) Discussions
16:00-
16:30
Coffee Break
16:30-
17:30
Government
and I.O.s
5. In-depth discussions on issues of particular relevance for the
Region(part II)
1) Presentation of a case study by OECD Secretariat
2) Discussions
19:00 Welcome Dinner hosted by
Executive Secretary of Korean Policy Centre
DAY 2
Friday 13 February 2015
Time Format Session
09:00-
10:15
Plenary 6. Stakeholders’ perspectives (Part I: Business)
1) Introduction by Co-chairs
2) Presentation by business representatives
3) Discussion
10:15-
10:45
Coffee Break
10:45-
12:00
Plenary 7. Stakeholders’ perspectives (Part II: NGOs’ and Trade Unions’
perspectives)
1) Introduction by Co-chairs
2) Presentation by other stakeholders
3) Discussion
4) Presentation by the OECD secretariat on Revenue Statistics in Asian
Countries

5. Time Format Session
12:00-
13:00
Lunch
13:00-
15:00
Government
and I.O.s
8. Toolkits for implementation
1) Introduction by the OECD secretariat
2) Discussions
15:00-
15:30
Coffee Break
15:30-
17:00
Government
and I.O.s
9.Next Steps
1) Introduction by the OECD Secretariat
2) ‘Tour de table’ where participants of all countries will be asked to
present their views
17:00-
17:30
Coffee Break
17:30-
18:00
Government
and I.O.s
10. Closing Remarks and Statement of Outcomes
19:00 Farewell Dinner hosted by
Ministry of Strategy and Finance, Korea

6. The programme was opened with remarks by Mr. Chang-Yong MOON, Deputy Minister,
Ministry of Strategy and Finance, Korea and it included BEPS and Developing Countries,
BEPS 2014 deliverables and next steps, BEPS 2015 Deliverables and discussion drafts, In-depth
discussions on issues of particular relevance for the Region(part I) and (part II) on the first day.
The next day started with programmes like Stakeholders’ perspectives (Part I: Business),
Stakeholders’ perspectives (Part II: NGOs’ and Trade Unions’ perspectives), Toolkits for
implementation, Next Steps, and Closing Remarks and Statement of Outcomes.

7. Asia- Pacific Regional Network Meeting on BEPS Project
Before on the meeting, it is important to have an idea about BEPS Project and BEPS.
BEPS Project
BEPS (Base Erosion and profit Shifting) project is a project of OECD (Organization for
Economic cooperation and Development) endorsed and supported strongly and confidently
by G2O countries.
What is BEPS?
Base erosion and profit shifting (BEPS) refers to tax planning strategies that exploit gaps and
mismatches in tax rules to make profit ‘disappear’ for tax purposes or to shift profits to location
where there is little or no real activity but the tax are low, resulting in little or no overall
corporate tax being paid.
What causes BEPS?
Corporate tax is levied at a domestic level, when activities cross border, the interaction of
domestic tax system means that an item of income can be taxed by more than one jurisdiction,
thus resulting in double taxation. The interaction can also leave gaps, which result in income not

8. being taxed anywhere. BEPS strategies take advantage of these gaps in order to achieve double
non-taxation.
OECD’s role in addressing BEPS
Many BEPS strategies take advantage of the interaction between the tax rules of different
countries, which means that unilateral action by individual countries will not fully address the
problem. In addition, unilateral and uncoordinated actions by governments responding in
isolation could result in double and possibly multiple- taxation for business. This would have a
negative impact on investment, growth and employment globally. There is therefore a need to
provide an internationally coordinated approach which will facilitate and reinforce domestic
actions to protect tax bases and provide comprehensive international solutions to respond to the
issue. The BEPS Action Plan provides a consensus – based plan to address these issues and is
part of the OECD`s ongoing efforts to ensure that the global tax architecture is equitable and fair.
OECD sets forth 15 actions to address in a comprehensive and coordinated way. These actions
will result in fundamental changes to the international tax standards and are based on three core
principles: coherence, substance, and transparency. The Action Plan also calls for further work to
address the challenges posed by the digital economy. Looking toward innovative approaches to
deliver change quickly, the Action plan calls for a multilateral instrument that countries can use
to implement measures developed in the course of the work. While the OECS steps up its efforts
to address double non- taxation, it will also continue work to eliminate double taxation, including
through increased efficiency of mutual agreement procedures and arbitration provisions.
The BEPS 15 Action Plan :
The BEPS Action Plan proposes fifteen Action Plans, of which nine are on substantive issues,
and six are aspects of coordination or procedures. The Action Plans are: 1.Digital Economy,
2.Hybrid mismatches 3.Controlled Foreign Corporations 4.Interest deductions 5. Harmful tax
practices 6.Treaty abuse 7.Permanent establishment 8.Transfer pricing intangibles 9.Tranfer
pricing: risks &capital 10.Other high risk transfer pricing 11.Analyse data 12.Disclosure of
aggressive tax planning 13.Transfer pricing documentation 14.Dispute resolution 15.Multilateral
instrument.
The BEPS Action plan calls for the development of tools that countries can use to shape fair,
effective and efficient tax systems. Because BEPS strategies often rely on the interaction of
countries’ different systems, these tools will have to address the gaps and frictions that arise from
the interactions of these systems. Some actions, for example work on the OECD Transfer Pricing
Guidelines and The Commentary to the OCED Model Tax Convention, will result in changes
that are directly effective. Other will be implemented by countries through their domestic law,
bilateral treaties or a multilateral instrument.
Addressing the BEPS issues

9. Addressing BEPS is critical for most countries and must be done in a timely manner so that
concrete actions can be delivered quickly before the existing consensus-based framework
unravels. At the same time, governments need time to complete the necessary technical work and
achieve widespread consensus. Against this background, it is expected that the Action Plan will
largely be completed within 2 years of its adaption. Indeed, the first set of measures and reports
was released in September 2014, just 12 months after the launch of the BEPS project. Work on
the reports to be delivered in 2015 has already started, and this work will continue at a fast pace
to ensure the repaid development of concrete measure that countries can use to end double non-
taxation and the artificial shifting of profits.
But taxation is at the core of countries’ sovereignty, and each country is free to set up its
cooperate tax system it chooses, including by charging the rate it chooses, That is why BEPS
project is not aimed at restricting the sovereignty of countries over their taxes ; instead it is
aimed at restoring and strengthening sovereignty of countries over their taxing rights by
ensuring that countries can protect their tax bases from economic activities that generate it. It
does so by addressing regimes that apply to mobile activities and that unfairly erode the tax bases
of other countries, potentially distorting the location of capital and services.
The BEPS project is not about increasing corporate taxes. Non- or low- taxation is not itself the
concern, but it becomes so when it is achieved through practices that artificially separate taxable
income from the activities that generate it. These strategies may increase tax disputes as
countries fight against tax strategies that defy common sense. Implementation of the
recommendations coming out of the BEPS project will reduce those disputes, giving business
greater certainty, and reinforcing the fairness and consistency of international tax system.
BEPS and United Nations
The Subcommittee on Base Erosion and Profit Shifting Issues for Developing Countries was
established at the ninth session of the UN Committee of Experts on International Cooperation in
Tax Matters (the UN Tax Committee) in October 2013.
The mandate of the Subcommittee is to monitor developments on base erosion and profit shifting
issues, communicate with officials in developing countries and engage with relevant bodies such
as the OECD on these issues. This work will feed the views expressed into the current
OECD/G20 BEPS project but also into ongoing United Nations tax cooperation work.
The Subcommittee released a questionnaire asking for developing countries’ feedback on their
experience regarding base erosion and profit shifting. China, India, Mexico, Singapore and
Brazil responded with very useful and insightful submissions.
The Subcommittee is seeking frank advice from developing nations on how base erosion and
profit shifting affects them, what prevents them from protecting their tax bases and their views
on the issues raised in the OECD BEPS Action Plan.

10. BEPS and Developing Countries
Taxation plays a central role in promoting sustainable development, and developing countries
face significant challenges in developing their tax capacities and mobilizing domestic resources.
BEPS is of major significance for developing countries due to their heavy reliance on corporate
income tax, particularly from multinational enterprises (MNEs). Developing countries have
identified the BEPS actions which are of highest and most immediate priority for them. These
include limiting base erosion via interest deductions and other financial payments (Actions 4) ,
preventing tax treaty abuse and the artificial avoidance of PE (Permanent Establishment ) status
(Actions 6 and 7), transfer pricing , in particular base eroding payment (actions 8,9 and 10), and
transfer pricing documentation and country-by-country reporting (Action 13). The lack of
transfer pricing comparables and the granting of wasteful tax incentives have also been identified
as areas of particular concern. These issues have not been specifically included in the BEPS
Project but are the subject of ongoing work, particularly through the Task Force on Tax and
Development. Political support and capacity building have been identified as key challenges for
developing countries, particularly as the implementation phase begins.
On the part of OECD, engagement with developing countries has been and will continue to be
extensive so that it is to ensure that the developing countries receive appropriate support to
address the specific challenges they face. Accomplishing the actions set forth in the BEPS
Action Plan requires an effective and comprehensive process that involves all relevant
stakeholders, including both developed and developing countries, Developing countries have
therefore been consulted extensively through a combination of regional and global high-level
policy dialogues. Over 80 developing countries and other non-OECD/ non-G20 economies have
been consulted in the first year of the Project through four-in -depth regional consultations and
five thematic global fora, attended by more than 110 jurisdictions and a number of
representatives from civil society and the business community.
The input received from development countries has been fed into working groups carrying out
the technical work on BEPS and reflected in the 2014 deliverable work (such as in relation to the
template for country- by- country reporting, or to the work on treaty abuse and the considerations
to enter tax treaty relationships).Further, this engagement has also been crucial in identifying the
specific challenges and priorities of low - income countries faced with BEPS issue.
In September 2014 the G20 Finance Minister asked the OCED to build on its current
engagement with developing countries and develop a new structured dialogue process, with clear
avenues for developing countries to work together and directly input into the G20/OCED BEPS
project. The OCED, working with other International Organizations and regional tax
administration fora, has also been mandated to develop tools to translate the BEPS Action Plan
into practical support for lower capacity developing countries, to be delivered in 2016,

11. The BEPS project has developed a plan to strengthen the engagement of developing countries in
the work and bring them closer to the heart of the BEPS technical work and decision – making
process.
Support for capacity building to address BEPS issues in developing countries is imperative. The
regional networks will play an important role in the development of tool kits. The practical
implementation of the BEPS measures and as well as some of the priority issues for developing
countries (tax incentive and transfer pricing comparable data) which are outside the BEPS
Action plan. The regional networks will also be a forum for interested developing countries to
discuss the negotiation and implementation of the multinational instrument under Action 15 of
the BEPS project.
Regional Consultation on Base Erosion and Profit Shifting(20-21 February 2014)
In response to the recognition that BEPS is a global problem which affects domestic resource
mobilization in developing countries, the first of four regional consultation events on BEPS was
held in Seoul, Korea, on 20-21 February 2014.The event brought together over 50 participants
from 22 countries in Asia-Pacific Region, as well as representatives from regional and other
international organization, including representatives from the UN Subcommittee on Base
Erosion and Profit Shifting Issues for Developing Countries and the Asian Development Bank.
Asia- Pacific Regional Network Meeting on BEPS Project in Seoul, South Korea (12-13
Feb, 2015)
The programme was opened with remarks by Mr. Chang-Yong MOON, Deputy Minister,
Ministry of Strategy and Finance, Korea and it included BEPS and Developing Countries,
BEPS 2014 deliverables and next steps, BEPS 2015 Deliverables and discussion drafts, In-depth
discussions on issues of particular relevance for the Region(part I) and (part II) on the first day.
The next day started with programmes like Stakeholders’ perspectives (Part I: Business),
Stakeholders’ perspectives (Part II: NGOs’ and Trade Unions’ perspectives), Toolkits for
implementation, Next Steps, and Closing Remarks and Statement of Outcomes.
Objective:
The objective of the meeting was to feed the views of developing countries into the BEPS work
and support the development of toolkits to assist implementation of BEPS solutions. The
Regional Network Meeting was part of a new structured dialogue process in the Asia Pacific
Region which will enable the views Partner economies, and particularly of developing countries
expressed at the meeting, to be taken into account in the ongoing discussions in the Global Fora,
Task force on Tax and Development and Working Party meetings relating to the BEPS Project
and the implementation of solutions to counter BEPS.

12. THE MEETING:
The Regional Network Meeting was held in Seoul, Korea, on 12-13 February 2015 hosted by
the Korean Policy Centre (Tax Programme) and focused on the key priority areas identified by
the Region at the regional consultation on BEPS that took place in sound in February 2014.
54 Participants from 22 economies in the Asia – Pacific Region, as well as representatives from
regional and international originations, including the Asian Development Bank (ADB), the
International Monetary Fund (IMF) and the Study Group on Asian Tax Administration and
Research (SGATAR) and US Agency for International Development (USAID).
Representatives of international and local business, and civil society were present in two
plenary sessions and shared their perspectives with tax officials. The meeting discussed:
(a) The BEPS issues identified as key priorities for countries in the Asia Pacific Region, and in
particular : (1) 2014 deliverables (2) On going 2015 deliverables with a forcus on recently
published BEPS discussion drafts, and (3) Toolkits and implementation strategies;
(b) How Partner economies can effectively provide their views into the BEPS Project and other
related work;
(c) How Partner economies can ensure that the development of toolkits can assist them to
implement solutions to counter BEPS.
12 countries in the Region participated directly in the BEPS project as OECD Members
(Australia, Japan, Korea, and New Zealand), G20 Members (china, India, and Indonesia),
Participants to the CFA (Malaysia and Singapore) and Bangladesh including Philippines and
Vietnam participated as Invitees of the OECD to the BEPS Project.
Outcomes of the Meeting
A. Key Messages:
1. Participants supported the new OECD/G20 strategy to strengthen the involvement of
developing countries into the BEPS project, under the G20 mandate, making the entire process
more inclusive and providing a unique opportunity to enhance cooperation in the Region.
2. Participants stressed the need to balance investment opportunities with domestic resource
mobilization in the region.
3. The meeting emphasized that active engagement in the BEPS process is important to ensure a
level playing field between MNES and domestic businesses.
4. Need to engage all stake holders, including business and civil society, in looking or solutions
to counter BEPS.

13. 5. The meeting emphasized the importance of capacity building and the need to obtain political
support to implement relevant tax measures.
B. Discussion on relevant Action plan to the Region:
1. Interest Deductibility (Action 4): Countries recognized the need to tackle BEPS situation
caused by the lack of coordinated and effective rules on the allocation of interest expenses.
2. Artificial avoidance of PE status (Action 7): Countries supported initiative to enhance current
PE rules, especially those relating to preparatory and auxiliary activities, but at the same time
highlighted the opportunity to develop guidance including on the relationship between Action 7
and the digital economy.
3. Transfer pricing issues (Actions 8-10): The general approach towards aligning taxation with
economic value creation was supported, but countries requested assistance in building capacity.
4. Transfer pricing documentation (Action 13): Participants welcomed the three-tiered approach
proposed, with particular regard to the Country by Country reporting, and emphasized the need
for consistency, confidentiality and appropriate use of the reported information for risk
assessment purposes.
5. Tax Incentives and Comparability : The participants welcomed the G20 DWG mandate to the
OECD, IMF, World Bank Group, UN to collaborate on developing toolkits to address
difficulties in accessing comparable data and on tax incentives and stressed the importance of
receiving support and assistance. They also considered the proposed scope satisfactory for their
needs and highlighted the new OECD structured dialogue process as an effective way to provide
their input/feedback in the preparation of the toolkits.
6. Business and NGO perspective : Representatives from the regional and local business
communities provided insights in several areas, such as insights in the unique management
features of Asian MNEs, challenges posed by the short timeframe to provide comments on BEPS
(and need for translation) and requested further guidelines and additional work on dispute
resolution. Representatives from civil society and NGOs shared feedback on various issues, such
as additional resources needed for tax policy development and capacity building as well as
provision of capacity- building support by regional multilateral organizations.
C. Next steps: Strengthening the engagement of partner Economies in the BEPS Project
and related work:
The meeting considered that the Partner Economies in the region should strengthen their
engagement in the BEPS Project and related work through various channels:
 To utilize this Regional Network to share updated information on the progress of the
various areas of work of the BEPS Project, including providing input into the

14. development and implementation of toolkits, and to take part in public consultations on
discussion draft on BEPS Deliverables as appropriate.
 To directly participate in the Committee on Fiscal Affairs and its subsidiary bodies as
Members, Associates, Participants or Invitees to the meetings and in the Global Forum on
Tax Treaties and on Transfer Pricing, and the Task Force on Tax and Development.
 To take part in the Global Relations Programme and the Tax and Development
Programme to ensure capacity building for the implementation of measures.
 Engagement with regional multilateral organizations, such as SGATAR to provide input
on the BEPS project.
The next steps in delivering the perspectives of this region into the technical process will take
place: (1) at the Global Forum on Transfer Pricing and the Task Force on Tax and
Development to be held in Paris on 16-18 March 2015: and (2) through direct participation of
countries in the region in the Committee on Fiscal Affairs (CFA) and its subsidiary bodies.
The input of this Regional Network meeting will also be fed into the development of toolkits
as part of the implementation phase of solutions to counter BEPS. The next Regional
Network Meeting will take place in October 2015 to discuss the outputs of the BEPS Project
and the further development to the toolkits and other issues related to the implementation of
the measures to counter BEPS.
Recommendation for Bangladesh regarding BEPS Project
Bangladesh has attracted some foreign direct investment, particularly in the natural gas sector.
Bangladesh is trying to attract more foreign direct investment in order to foster growth and
economic development and to exploit its natural resources. The principal foreign direct investors
around the world are Multinational Enterprises (MNEs). MNEs can engage in profit-shifting
activities in order to maximize their risk-adjusted after-tax profit. If Multinational Enterprises
(MNEs) engage in profit-shifting activities, then these activities can have detrimental effects on
the national exchequer.
Implementation of the OECD Action plan will level the playing field and restore fairness and
common sense to the international tax system by ensuring that business that operate cross-border
and have access to sophisticated tax expertise will not have unintended competitive advantages
relative to business operating at domestic level. The work is therefore about aligning taxation
with economic activities and value creation, rather than about increasing overall tax burden.
Bangladesh, like other developing countries, will be immensely benefitted from OECD BEPS
Project, as it has double taxation agreement with other countries and legislation regarding
transfer pricing has been introduced and Transfer Pricing Cell has been established. As a
growing economy, for capacity building and restructuring the necessary laws to cope up with
new challenges that is happening in international taxation, there is an utmost necessity that

15. Bangladesh needs to engage its exclusive efforts with OECD project to update itself from time to
time so that it can encounter harmful practices of the large Multinational Enterprises (MNEs)
Submitted by
Md. Mahmudur Rahman
Director, BCS (Tax) Academy,
Dhaka, Bangladesh.