OECD / BEPS : OECD releases discussion drafts on BEPS Actions 4 and 14

OECD has released two more discussion drafts under the BEPS (Base Erosion and Profit Shifting) project, this time concerning Action 4 (Make dispute resolution mechanisms more effective) and Action 14 (Limit base erosion via interest payments and other financial payments). The discussion draft on Action 4 focuses on best practices in the design of rules […]

Written By ACT Team

On January 28, 2015
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OECD has released two more discussion drafts under the BEPS (Base Erosion and Profit Shifting) project, this time concerning Action 4 (Make dispute resolution mechanisms more effective) and Action 14 (Limit base erosion via interest payments and other financial payments).

The discussion draft on Action 4 focuses on best practices in the design of rules to prevent base erosion and profit shifting using interest and other financial payments economically equivalent to interest and stresses the need to address base erosion and profit shifting using deductible payments such as interest that can give rise to double non-taxation in both inbound and outbound investment scenarios. It examines existing approaches to tackling these issues and sets out different options for approaches that may be included in a best practice recommendation. The discussion draft also identifies specific questions where input is required in order to advance this work.

The discussion draft on Action 14 recognizes that the actions to counter BEPS must be complemented with actions that ensure certainty and predictability for business by improving the effectiveness of the mutual agreement procedure (MAP) in resolving treaty-related disputes. The discussion draft is the preliminary result of the work done to identify comprehensively the obstacles that prevent countries from resolving disputes through the MAP and to develop possible measures to address these obstacles.

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For further information, please contact one of the firm’s tax partners, Stephen Balzan on [email protected] or Elaine Camilleri [email protected]. ACT can help you understand the changes to the tax rules and how these can impact your business.  

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