What is BEPS reporting?

Background. CbC reporting is one of the four minimum standards of the BEPS project, and requires tax administrations to collect and share detailed information on all large multinational entities (MNEs) doing business in their jurisdiction.

What is BEPS action7?

The work carried under BEPS Action 7 provides changes to the definition of permanent establishment in the OECD Model Tax Convention to address strategies used to avoid having a taxable presence in a jurisdiction under tax treaties.

What is a permanent establishment OECD?

PERMANENT ESTABLISHMENT. 1. For the purposes of this Convention, the term “permanent establishment” means a fixed place of business through which the business of an enterprise is wholly or partly carried on. 2.

What is the purpose of BEPS?

Base erosion and profit shifting (BEPS) refers to tax planning strategies used by multinational enterprises that exploit gaps and mismatches in tax rules to avoid paying tax.

What is CbC reporting?

What is CbCR and what is a CbC report? A CbC report provides local tax authorities visibility to revenue, income, tax paid and accrued, employment, capital, retained earnings, tangible assets and activities.

How do you avoid PE status?

In order to circumvent the PE status company splits it long term contract to short term contract by bypassing the time threshold that trigger the Permanent Establishment. OECD has attempted to prevention of treaties abuse by introducing ”Principal Purpose Test”.

Is a Home Office a permanent establishment?

home office generally will not constitute a PE. 4 However, in all cases the presence has to be continuous and thus, of a certain permanency. Generally, the OECD considers six months to be a requisite time period, unless the nature of the business requires less time.

Is USA part of BEPS?

While the US has not adopted BEPS wholeheartedly, it has adopted several unilateral measures that would reduce base erosion and profit shifting.

What are the BEPS minimum standards?

The BEPS Associates committed to the four minimum standards, namely countering harmful tax practices (Action 5), countering tax treaty abuse (Action 6), transfer pricing documentation and country-by-country (CbC) reporting (Action 13), and improving dispute resolution mechanisms (Action 14).

What is action 7 of BEPS?

• Action 7 of BEPS focuses on updating the definition of PE in Article 5 of the OECD model tax treaty. The main objective is to prevent the artificial avoidance of PEs where there is significant activity in a country.

Does BEPS action 7 address the artificial avoidance of PE status?

The final report, compared to the revised discussion draft, BEPS Action 7: Preventing Artificial Avoidance of PE Status, issued in May 2015, 6 contains no major changes in terms of the position taken by the OECD on the perceived BEPS abuses arising from the artificial avoidance of PE status.

What is the BEPS Action Plan Global Tax Alert?

This Alert provides a high-level overview of the documents released by the OECD on 5 October on the BEPS Action Plan. Further EY Global Tax Alerts will be issued with more detailed analysis of the final reports on each of the 15 Actions.

What does the OECD’s Final BEPS report recommend?

The final report recommends greater cooperation between the OECD and taxing authorities in the collection and sharing of data. It also identifies several additional measures of BEPS that will become possible using the data collected under Actions 5, 12, and 13.