The OECD’s Action Plan on Base Erosion and Profit Shifting presented to the G20 Finance Ministers at their meeting in Moscow represents a significant development in global collaboration to modernize the international tax system, a KPMG report explains.
Read: OECD targets tax loopholes exploited by multinationals
“Updating 75 years of international tax law within the 24 month timetable set out on July 19 is without a doubt a very ambitious undertaking,” says David Francescucci, tax partner, KPMG. “While prompt action is required, modernizing fundamental international tax principles in a coordinated fashion, while incorporating the aspects of the current tax system that work, will not be straightforward.”
The 15 actions presented in the plan focus on a number of key areas including the digital economy, hybrid mismatch arrangements, controlled foreign corporation rules, excessive intercompany interest payments, harmful tax practices, treaty abuse, avoidance of permanent establishment status, transfer pricing, aggressive tax planning and greater transparency and disclosure.
Read KPMG’s analysis of the plan here.
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