OECD - Base Erosion & Profit Shifting
OECD and G20 BEPS Action Plan: Changes to the International Tax System
Limit Base Erosion via Interest Deductions and Other Financial Payments
- 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.
Limit base erosion via interest deductions
and other financial payments
Develop recommendations regarding best practices in the design of rules
to prevent base erosion through the use of interest expense,
for example through the use of related-party and third-party debt
achieve excessive interest deductions or to finance the production of
exempt or deferred income
, and other financial payments
that are economically equivalent to interest payments.
The work will evaluate the effectiveness of different types of limitations.
In connection with and in support of the foregoing work, transfer
will also be developed regarding the pricing of
financial transactions, including
- financial and performance guarantees,
- derivatives (including internal derivatives used in intra-bank dealings), and
- captive and other insurance arrangements.
The work will be co-ordinated
with the work on hybrids and CFC rules