On 4 October 2022 the OECD released a document with the title OECD/G20 Inclusive Framework on BEPS: Progress Report September 2021-September 2022. The progress report summarises developments in the work of the Inclusive Framework on base erosion and profit shifting (BEPS) in the year to September 2022.
Since the last progress report of the OECD/G20 Inclusive Framework on the BEPS project, 137 countries and jurisdictions have joined the agreement of 8 October 2021 on the two-pillar solution to address the tax challenges of the digital economy. In the past year, progress has been made on implementing the agreement. On Pillar Two, the Global Anti-Base Erosion (GloBE) Model Rules for the minimum tax and the related commentary were published in December 2021.
On 11 July 2022 the Progress Report on Amount A was released for public consultation, setting out the technical rules required for implementation of the agreed reallocation of taxing rights under Amount A. Further consultation, including additional stakeholder input, is needed to finalise the design of the rules. The work on the Multilateral Convention (MLC) to implement Amount A and the Explanatory Statement is to be completed by the first half of 2023 and will come into force in 2024.
Action 5 on Harmful Tax Practices
In April 2022, the Forum on Harmful Tax Practices (FHTP) concluded its first annual monitoring of the practical effectiveness of the substantial activities requirements in no (or nominal) tax jurisdictions.
Action 6 on Tax Treaty Abuse
In March 2022 the fourth peer review report on the implementation of the Action 6 minimum standard to prevent treaty shopping, was released showing that level of compliance has more than doubled since last year. Around 2,300 of 2,400 tax treaties between OECD/G20 Inclusive Framework members is estimated to become compliant with the minimum standard in the near future. Most member countries are relying on the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS (MLI) to implement Action 6.
Action 13 on Country-by-Country (CbC) Reporting
In October 2021, the fourth phase of peer reviews under the Action 13 minimum standard on CbC reporting was released, showing that more jurisdictions introducing domestic legislation to require CbC reporting, and those with existing legislation are putting into place exchange relationships and addressing recommendations from earlier peer reviews. However developing countries continue facing significant challenges in meeting the CbC reporting requirements and only a few of them have access to CbC reports from abroad.
Action 14 on Mutual Agreement Procedure
The aim of the minimum standard is to ensure that tax disputes are resolved in a timely and efficient way. A total of 82 jurisdictions have been reviewed under the two-stage approach and the latest batch of stage 2 peer reports was approved in June 2022.
Transfer Pricing Guidelines
The 2022 edition of the OECD Transfer Pricing Guidelines consolidates the changes made to the 2017 edition and those approved by the OECD/G20 Inclusive Framework since 2017.
Other
The Inclusive Framework is aiming to ensure a more systematic inclusion of developing countries. Marlene Nembhard-Parker of Jamaica has been elected as a co-chair, to strengthen the representation of developing countries, and a number of countries are receiving targeted technical assistance and bilateral capacity building programs.
