Strategizing Multinational Tax Risks

The EU Council has provided a Directive that would introduce legislation ensuring the EU maintains its leadership role in anti-BEPS recommendations, as well as providing good tax governance for the rest of the world.  EY’s summary of the Directive is provided for reference:

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Key points:

• Automatic exchange of tax rulings would be effective 1/1/2017.
• Changes would be introduced for the EU Code of Conduct.
• EU anti-BEPS proposal to include the following BEPS Actions:
  • 2: Hybrid mismatches
  • 3: CFC rules
  • 4: Interest limitations
  • 6: General anti-abuse rule (noting its inclusion for the Royalty & Interest Directive, similar to the Parent-Subsidiary Directive)
  • 7: PE status
  • 13: Country-by-Country (CbC) reporting
• Common Corp. Tax Base (absent later consolidation phase) proposal to be introduced in 2016

The EU continues its pace to maintain its global lead in addressing anti-BEPS concerns, which will impact non-EU countries around the world.  Thereby, it provides another set of rules that would be mandated to achieve EU conformity.