Daily Tax Update - September 16, 2014: OECD Releases First BEPS Deliverables

OECD Releases First BEPS Deliverables:  The Organization for Economic Cooperation and Development (OECD) today released the first seven components of its comprehensive plan to create a coordinated international approach for combating tax avoidance by multinationals under the OECD/G-20 Base Erosion and Profit Shifting (BEPS) Project. 

The OECD’s work is based on a BEPS Action Plan, released in July of 2013, setting out 15 key elements to be addressed by 2015.  The BEPS Action Plan is designed to create a single set of international tax rules to end the erosion of tax bases and the artificial shifting of profits to low- or no-tax jurisdictions to avoid paying tax.  The project also aims to offer increased certainty and predictability to taxpayers, while guarding against new domestic rules that result in double taxation, unwarranted compliance burdens, or restrictions to legitimate cross-border activity. 

The set of deliverables are as follows:

  • Action 1 — a report on tax challenges of the digital economy
  • Action 2 — model domestic legislation text and model treaty provision for neutralizing the effect of so-called hybrid mismatch arrangements
  • Action 5 — a report to the G-20, “Countering Harmful Tax Practices More Effectively, Taking Into Account Transparency and Substance,” updating earlier OECD work
  • Action 6 — measures for preventing the granting of treaty benefits in inappropriate circumstances
  • Action 8 — guidance on transfer pricing aspects of intangibles
  • Action 13 — guidance on transfer pricing documentation and country-by-country reporting
  • Action 15 — a report on the legal feasibility of using a multilateral instrument based on the OECD Model Tax Convention on Income and Capital to update some 3,000 bilateral double-tax treaties around the world

The OECD recommendations will be a key item on the agenda at the G-20 finance ministers meeting scheduled for September 20-21 in Cairns, Australia.

The OECD BEPS deliverables and explanatory materials are available here.

Rep. Camp Introduces Jobs Bill in House:  House Ways and Means Committee Chairman Dave Camp (R-MI) introduced yesterday the Jobs for America Act (H.R. 4), which includes several tax provisions already passed by the House, such as a permanent tax credit for research and development, permanent bonus depreciation, and other provisions that expired at the end of 2013.  Additionally, the bill contains a provision to repeal the medical device tax in the Affordable Care Act. 

The text of the bill can be found here.

JCT Releases Report on Energy-Related Tax Expenditures:  The congressional Joint Committee on Taxation (JCT) released a report earlier today providing a summary of the present tax law rules regarding energy-related federal tax incentives and a discussion of the economic rationale for certain government intervention in energy markets through the tax code and issues related to the proper design of such tax preferences.  The Senate Committee on Finance has scheduled a public hearing for tomorrow. 

The text of the report can be accessed here