Strategizing International Tax Best Practices – by Keith Brockman

Posts tagged ‘Tax Executives Institute’

TEI comments: BEPS Action Plan 11

Tax Executives Institute, Inc. (TEI) has provided comments to OECD BEPS Action Plan 11, data collection and BEPS actions.

The comments highlight the wariness of measuring BEPS actions and reacting thereto.  TEI discusses three key deficiencies of trying to measure such data and assess its effectiveness; (1) a lack of understanding  of the current state of affairs, lack of a defined goal to the OECD’s BEPS project, and lack of definition of BEPS behaviors.  The comments are referenced at:

Click to access TEI%20Comments%20-%20Action%2011%20Data%20Collection%20-%20FINAL%20to%20OECD%2017%20September%202014.pdf

Some key TEI comments:

  • Taxing authorities may use a subjective “we know it when we see it” approach rather than objective, evidenced-based measures.
  • The focus on a disconnect of taxable income from activity and value creation also raises concerns that tax authorities may use the measures developed by BEPS Action 11 to advance formulary apportionment approaches to transfer pricing.
  • TEI urges the adoption of a clear definition of BEPS and BEPS behaviors before attempting to develop mechanisms to differentiate inappropriate (if legal) tax results from “regular” corporate tax planning that may take advantage of government enacted tax incentives.
  • A central tracking mechanism for assessing an increase in mutual agreement procedure cases and tax controversy and litigation raising double taxation concerns should be developed.

As the BEPS Action Plans are reviewed and implemented by countries worldwide, it is helpful to review TEI’s comments to ensure there is a comprehensive understanding of the perceived abuses and risks that BEPS Action Plans have addressed.

TEI’s comments: OECD Draft Handbook on Transfer Pricing Risk Assessment

Tax Executives Institute (TEI) has provided comments to the OECD Draft Handbook on Transfer Pricing Risk Assessment, for which the relevant links are provided for reference.  A link to TEI is also included in the Recommended Links page of this blog.

http://www.oecd.org/ctp/transfer-pricing/Draft-Handbook-TP-Risk-Assessment-ENG.pdf

Click to access TEI%20Comments%20-%20OECD%20Draft%20Handbook%20on%20Transfer%20Pricing%20Risk%20Assessment%20-%20FINAL%20to%20OECD%2011%20September%202013.pdf

These comments are useful in comprehending the complexity of transfer pricing risks and documentation concerns, especially against the backdrop of OECD’s recent White Paper on Transfer Pricing Documentation (31 July post) and its Revised Draft for the Transfer Pricing of Intangibles (3 August post).  International tax executives should review OECD’s proposals and public comments from TEI and other organizations to develop a risk framework for new transfer pricing challenges and country-specific initiatives.

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