The G20 has provided a set of guiding principles re: definition of “beneficial owner” in its efforts to improve transparency and address abuse. A link to the principles is provided:
The principles are a proactive effort by the G20 to identify the ultimate ownership / control of legal entities, provide such information in a mechanism that allows sharing by tax authorities and competent authorities, as well as assessing risk of legal structures and designing actions to fight abuse.
The principles should be compared to the new definition and guidance re: “beneficial owner” provided for the update to the 2014 OECD Model Convention (refer to 22 July 2014 post), which conveyed that the term should be understood in its context and in light of the object and purposes of the Convention including avoiding double taxation and prevention of fiscal evasion and avoidance.
The focus on “Beneficial Ownership” is increasing, thereby increased diligence re: documentation to address transparency and benefits of current legal structures should be a top priority for MNE’s.