Strategizing Multinational Tax Risks

BEPS update

EY’s Global Tax Alert provides recent developments for BEPS by Australia, Austria, Belgium, EU, Germany, Iceland, India, Niger, and Romania.

Click to access 2016G_01449-161Gbl_The%20Latest%20on%20BEPS%20-%206%20June%202016.pdf

Highlights:

• Australia: Local File is OECD +, going beyond OECD’s recommendations, including transactional detail.  This development is proving that global consistency is a rapidly fading ideal, as countries legislate what they think benefits them the most.  Unfortunately, this adds to the cost, time and complexity of preparing global reports.
• Austria: Transfer pricing documentation draft regulations follows the OECD.
• Economic and Financial Affairs Council of the European Union (ECOFIN): EU Member States Finance Ministers, envision adopting the Anti-Tax Avoidance Directive on 17 June 2016, subject to amendments.  Legal agreement was also reached on adoption of the Directive on the exchange of non-public country-by-country tax information.  Conclusions were also adopted on the European Commission communication on an external tax strategy and tax treaty abuse measures.
• Germany: Transfer pricing technical draft introducing transfer pricing documentation standards as recommended by the OECD.  Master File and Local File documentation requirements introduced.
• India: A 6% Equalization Levy (EL) to apply on gross payments for certain digital services received by a nonresident.
• Niger: Thin capitalisation rules introduced.
• Romania: To become a BEPS Associate and participate in the OECD’s framework.

As the above developments note, BEPS guidelines and intent remains very strong in the global community, with many changes already made and many more to come.