BEPS: Avoiding mismatches in tax rules

The OECD has issued a public discussion paper on Base Erosion Profits Shifting (BEPS) that corporate treasurers may wish to pay attention to and submit responses to by 7 September. BEPS has exercised many multinational corporates as it focuses on the thorny problem of where profits are actually made, and where they should be taxed.

BEPS has been evolving to highlight tax avoidance strategies that may exploit mismatches in tax rules to artificially shift profits to low or no-tax locations. Under the framework, the OECD says over 100 countries and jurisdictions are collaborating to implement the BEPS measures and tackle BEPS. The discussion document also speaks to transfer pricing, cash pooling and the treatment of guarantees and captive insurance.

At 43 pages, this is not light holiday reading, but it asks specific questions that corporates may wish to answer (briefly).