OECD – INCLUSIVE FRAMEWORK ON BEPS. PROGRESS REPORT JULY 2016-JUNE 2017. The OECD/G20 Project to address Base Erosion and Profit Shifting (“BEPS”) was launched following a request by G20 Leaders in June 2012 to identify the key issues that lead to BEPS. The OECD’s February 2013 report, Addressing BEPS, became the basis for the 15-point BEPS Action Plan which was endorsed by the OECD Council, as well as by G20 Leaders at their July 2013 Summit in Saint Petersburg. Organised around three pillars, the objectives of the Project were to (i) reinforce the coherence of corporate income tax rules at the international level, (ii) realign taxation with the substance of the economic activities, and (iii) improve transparency. As a result of an ambitious work programme that was completed in only two years, the BEPS package of 15 measures was delivered in October 2015. The package of measures was developed by 44 countries including all OECD and G20 Members participating on an equal footing, as well as through widespread consultations with more than 80 other jurisdictions in addition to input from stakeholders including business, academics and civil society. In parallel, based on a 2014 survey of the top priority BEPS-related issues facing low income countries, the OECD had begun work with other international organisations on a series of toolkits for low capacity countries to try to address these issues in a practical way. The Inclusive Framework on BEPS – In September 2015, the G20 Finance Ministers called on the OECD to build “a framework by early 2016 with the involvement of interested non-G20 countries and jurisdictions, particularly developing economies, on na equal footing”. The G20 Leaders reiterated this request in their November 2015 communiqué: To reach a globally fair and modern international tax system, we endorse the package of measures developed under the ambitious G20/OECD Base Erosion and Profit Shifting (BEPS) project. Widespread and consistent implementation will be critical in the effectiveness of the project, in particular as regards the exchange of information on cross-border tax rulings. We, therefore, strongly urge the timely implementation of the project and encourage all countries and jurisdictions, including developing ones, to participate. To monitor the implementation of the BEPS project globally, we call on the OECD to develop an inclusive framework by early 2016 with the involvement of interested non-G20 countries and jurisdictions which commit to implement the BEPS project, including developing economies, on an equal footing. In February 2016, the proposed architecture of the Inclusive Framework on BEPS (“the Inclusive Framework”) was endorsed by G20 Finance Ministers, and its inaugural meeting was held in Japan in June 2016. Today, 100 countries and jurisdictions have joined the Inclusive Framework, and, having all committed to implement the BEPS package, are now progressing the Inclusive Framework’s mandate, which is to: i. Review the implementation of the 4 BEPS minimum standards; ii. Gather data for the monitoring of the other aspects of implementation, including under BEPS Actions 1 (on the tax challenges of the digital economy) and 11 (on measuring and monitoring BEPS); iii. Finalise the remaining technical work to address BEPS challenges; and iv. Support jurisdictions in their implementation of the BEPS package, including by providing further guidance on the standards and by developing toolkits for low income countries. This report – This report by the Inclusive Framework on BEPS presents the current state of play in progressing its mandate, covering the period from July 2016 to June 2017. Part 1 of the report sets out the progress made in implementation of the BEPS package, including the four minimum standards, and also highlights the impact on BEPS activities that these measures are already having. Part 2 outlines the work of the Inclusive Framework in this 12-month period: the establishment of the peer review processes, the ongoing standard-setting work and delivery of guidance on implementation, as well as the assistance being delivered, often in partnership with other international organisations and regional bodies, to ensure all countries and jurisdictions are supported in the BEPS implementation process.
