tax ACADEMY
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KENYA

OECD - Base Erosion & Profit Shifting





Chapter 7

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.


Counter Harmful Tax Practices
Action 5
Counter harmful tax practices more effectively, taking into account transparency and substance

Revamp the work on harmful tax practices with a priority on improving transparency, including compulsory spontaneous exchange on rulings related to preferential regimes, and on requiring substantial activity for any preferential regime.

It will take a holistic approach to evaluate preferential tax regimes in the BEPS context. It will engage with non-OECD members on the basis of the existing framework and consider revisions or additions to the existing framework.

Issues to be examined include, but are not limited to,

  • Firstly, the assessment of preferential tax regimes

  • Secondly, the peer review and monitoring of Action 5 transparency framework through the compulsory spontaneous exchange of information on taxpayer specific rulings

  • Thirdly, the review of substantial activities requirements in no or only nominal tax jurisdicions (significant low corporate tax rate) to ensure a level playing field.


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