In October 2015, two and a half years of frenetic activity culminated in the release of the final reports of the G20/OECD ‘Action Plan’. These outline the changes necessary to make the international tax framework ‘fit for purpose’ in the digital age.
Things have quietened down since October 2015, but the OECD is pushing ahead with the development of a Multilateral Instrument (MLI) which will permit sovereign states to update existing double tax agreements (DTA’s) with the stroke of a pen. Expect this to happen from the end of 2016, after which the world’s existing 3,000+ DTA’s will start to reflect the BEPS law changes.
Domestically, many developed countries have started, or are actively reviewing the necessary changes to local tax laws to implement the BEPS changes.
This apparent period of inaction is no more than the calm before the storm. Some BEPS changes are already law, and these will be joined by further domestic and international changes from 2016.
All companies operating internationally need to be aware of the BEPS changes, and to have reviewed their existing arrangements and structures to determine whether they will remain effective in a post-BEPS legislative environment. Now is the time for action whilst the initiative remains with the taxpayer company.
RSM is recommending businesses in the post-BEPS world, perform a high level BEPS Risk Assessment. It may be that existing arrangements will remain effective, but the extent of the BEPS Action Plan is so vast, that careful analysis will be required to identify possible risks hidden in the detail of the new rules.
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