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OECD Tax Talk #6 - 26 June 2017
The OECD webinar focused primarily on progress regarding the Inclusive Framework, the review process and the AIA.
Inclusive Framework
Pascal Saint-Amans first informed about the third meeting of the Inclusive Framework in the Netherlands, which took place in June 2017. More than 80 countries participated in this meeting and they welcomed Vietnam as the hundredth member. And despite the large number of participants, Saint-Amans stressed that the collaboration worked well as a working group. Now, more than 95% of the world economy is involved in the implementation of the BEPS project. The result of this meeting is a report that will be presented at the G20 meeting in Hamburg on 8 July.
Multilateral Instrument
Maikel Evers then briefly presented how the developed database, which was to be launched in July 2017, works. So far, the database covers 68 countries and there are still over a thousand contracts waiting to be matched.
Achim Pross also commented on the progress of the review process. Regarding Action Item 5 (preferential tax regimes), 125 regimes have been identified and classified into harmful, potentially harmful and non-harmful regimes. The results of this process will be published in the next report and there will be regular updates on further developments after the summer. Regarding action item 14 (dispute resolution), the first group of countries (including Switzerland) has been approved and the report should be published in July 2017. The review of the second group of countries is currently underway. Achim Pross stressed that inputs in these mutual agreement procedures are always very welcome. There are also positive things to report regarding Action Item 13 (Country by Country Reporting). On 7 June 2017, seven more countries signed the multilateral treaty, including Switzerland. 30 countries have already enacted the legal framework for CbC reporting, and 55 more countries are currently working on enforcement. The launch is scheduled for June 2018 and a plan is being developed to include developing countries in the process so that they can also benefit.
Afterwards, Melinda Brown and Mayra Lucas briefly informed about the two discussion drafts concerning, on the one hand, the profit distribution method and, on the other hand, the exclusion of permanent establishment profits.
Achim Pross' short input on mismatches in branches, which entail the same problems as hybrid companies, was also interesting. A report on this topic will also be published in July 2017.
Tax Transparency
Monica Bhatia presented the results of the fast-track process, which will be presented to the G20 on 8 July. Only one of the five countries classified as "non-compliant" is still on the list. Three of the four unclassified countries have been classified as "largely compliant" and only seven countries are still "partially compliant". This is great progress.
The AEOI is scheduled to start in September 2017. Information on financial accounts will be exchanged in particular, but also CbCR and rulings. However, countries must have robust frameworks in place to ensure the confidentiality of the information exchanged and that it is only used for tax purposes.
Conclusion
Pascal Saint-Amans ended this sixth webinar with his usual enthusiasm. " The world has changed" and much progress has already been made in the direction of"tax transparency". Nevertheless, this was not enough. We have to see whether today's efforts and the commitment of the countries will lead to a qualitatively satisfactory implementation in the legislation and the exchange of information tomorrow. The next update will follow in September 2017 in another Tax Talk.