BEPS: OECD to publish further papers in their action plan

By Mike Cooper

By the end of April 2015 the OECD is proposing to publish at least five further papers under its Base Erosion and Profit Shifting (BEPS) action plan. These will be a combination of revised drafts of papers you’ve already seen in part and entirely new papers. As well as providing some of the final pieces of the jigsaw, we are nearing crunch time on a number of contentious issues.

Publication of the first draft of the controlled foreign companies paper is long-awaited and has the potential to significantly influence the way that multinationals respond to key aspects of the BEPS agenda. In addition to this we are expecting first drafts of the papers on the disclosure of aggressive tax planning and on the wider economic impact of BEPS.

The last of the papers that we’ll see for the first time is one addressing the use of cost contribution arrangements, such as the cost sharing arrangements that many groups have in place for the development of intellectual property. This paper will be published alongside a revised draft of the paper considering the transfer pricing of intangibles. Together, these will go to the heart of one of the key themes of BEPS - the extent to which operational substance should trump legal form. This is just the latest instance of this issue being explored, following on from the proposals to amend the OECD's guidelines on the approach to delineating transactions contained in the draft risk and recharacterisation paper from December last year. It will be interesting to see what level of consensus has been reached at this point.

With final versions of the BEPS papers being readied for submission to the OECD’s fiscal committee ahead of the summer break, time is fast running out to reach a decision on some of these central points. The challenge for the OECD will be settling on proposals that a critical mass of territories will buy into and will see through to implementation.

Make sure you understand how these papers could impact you through our dedicated web pages or get in touch directly.

Mike Cooper

[email protected] /0207 213 5212