PwC comments on the OECD's Base Erosion and Profit Shifting (BEPS) reform project

Stella Amiss, international tax partner at PwC, said:

"The OECD's achievement should not be underestimated. Today's package of reforms achieve far more consensus and progress than many expected when the OECD's action plan was first announced.

"Most multinationals are likely to be affected in some way. International businesses will need to look at the way their operations and investments are financed, and may face additional withholding taxes or find it harder to access particular tax treaties.

"Today marks a milestone in what remains a long and challenging journey. There are concerns that some parts of the reform package will work better than others, and some of the rules are fairly vague.  Much hinges on whether, and how, governments worldwide decide to implement the recommendations. There's likely to be a period of uncertainty with mismatches in timing and approach. For areas where the OECD has found it harder to reach consensus there is the risk that countries introduce their own measures which could well result in a real risk of double taxation for businesses. 

"The tension between harmonising the international tax rules and tax competition between countries is arguably the biggest pressure point for the OECD project. The UK has been a vocal supporter of the OECD reforms and faces a delicate balancing act of implementing the rules - which could restrict the options for attracting investment - and maintaining its tax competition agenda.

"There needs to be ongoing momentum to review whether the OECD's recommendations are working well and enhancing, not constraining, the growth of global commerce, in line with the OECD's mission to do just this."

ENDS

For further information or to arrange an interview, please contact. Nicola Thorogood. [email protected] / 020 7804 6007