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OECD - Base Erosion & Profit Shifting

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Chapter 12

OECD and G20 BEPS Action Plan: Changes to the International Tax System

• The (BEPS) Project, an ambitious plan undertaken jointly by the OECD and G20 to overhaul the global international tax system, culminated with a huge report of recommendations that, if adopted, could have a significant impact on cross-border trade.

Assure Transfer Pricing Outcomes are in line with Value Creation : Other High Risk Transactions

Develop rules to prevent BEPS by engaging in transactions which would not, or would only very rarely, occur between third parties. This will involve adopting transfer pricing rules or special measures to:

1. clarify the circumstances in which transactions can be recharacterised;
2. clarify the application of transfer pricing methods, in particular profit splits, in the context of global value chains; and:
3. provide protection against common types of base eroding payments, such as management fees and head office expenses.

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