OECD: Meeting of Inclusive Framework on BEPS

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On 22 June 2017 the third meeting of the inclusive framework on base erosion and profit shifting (BEPS) took place in the Netherlands with representatives of 83 countries and jurisdictions and 12 international and regional organizations. The jurisdictions participating in the inclusive framework are involved in the development of the monitoring process for the four minimum standards under BEPS and in the review mechanisms for other parts of the BEPS package. The inclusive framework is also involved in developing toolkits to assist developing countries in BEPS implementation. The participating countries can provide input to the work on toolkits and the remaining BEPS standard-setting work. The inclusive framework now has 100 member jurisdictions.

Monitoring report

The meeting discussed and approved its first monitoring report, to be submitted to the G20 summit to be held on 7 and 8 July 2017. The monitoring report outlines progress since the first meeting in Kyoto in June 2016.

BEPS discussion drafts

The meeting also approved the release of discussion drafts on attribution of profits to permanent establishments (PEs) and on transactional profit splits. These are part of the continuing work on the OECD’s BEPS action plan. The discussion draft on the attribution of profits to permanent establishments sets out high level principles that countries can apply in attributing profits to PEs whether or not they have incorporated the authorized OECD method (AOA) into their law and regulations.

The discussion draft on the transactional profit split method sets out revised text for the guidance on profit splits in Chapter II of the OECD transfer pricing guidelines. Input is requested from interested parties on the continued inclusion in the guidelines of capital or capital employed as potential profit splitting factors; and on whether a head count of similarly skilled employees should be included as a potential profit splitting factor. The guidance also invites comments on how to determine whether a profit split should be based on anticipated profits or actual profits.

Competent Authority Agreement for CbC Reporting

The number of signatories to the Multilateral Competent Authority Agreement for Country-by-Country Reporting (CbC MCAA) has risen to 64 following its signature by a number of further jurisdictions. The CbC MCAA is a multilateral agreement that allows the signatories to bilaterally exchange CbC Reports as recommended in Action 13 of the action plan on BEPS. The exchange of CbC reports is intended to combat tax avoidance and evasion by enabling tax administrations to gain an overview of how each MNE is structuring its operations. The agreement also aims to ensure the confidentiality and appropriate use of the information in the reports.


The countries involved in the Inclusive Framework also discussed the toolkits under development by the Platform for Collaboration on Tax, including the toolkit on comparables that was issued during the meeting. This toolkit is intended to help developing countries overcome the problem of lack of comparables to use in transfer pricing studies. It suggests measures such as safe harbor rules for transfer pricing; making better use of data available to the tax administration from taxpayer tax returns and other documentation; and further development of a framework for selecting and applying the most appropriate transfer pricing method.


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