Global tax planning has undergone a substantial overhaul over the past few years, initiated by CRS and BEPS! However, several other changes are proposed as below.
There are no "quick fix"
solutions post FATCA/OECD!
Beware of advisers promoting
to good to be true "schemes"!
International tax planning may now, certainly in the short term, be about damage control and restructuring â€“ beware of advisers promising quick fix solutions otherwise!
Contact Jaswinder (Jas) Sekhon, the global head of our tax practice for a no obligation discussion on what this may mean for your outmoded structures and for your future international expansion plans.
09/03/2018 - OECD issues new model disclosure rules that require lawyers, accountants, financial advisors, banks and other service providers to inform tax authorities of any schemes they put in place for their clients to avoid reporting under the OECD/G20 Common Reporting Standard (CRS) or prevent the identification of the beneficial owners of entities or trusts.
The OECD is also addressing cases of abuse of golden visas and similar schemes to circumvent CRS reporting.
"Due to rising government and community concern about BEPS strategies, G20 finance ministers asked the OECD to develop an action plan addressing BEPS issues in a co-ordinated and comprehensive manner. This resulted in the release of the OECD BEPS 15 Action Plan Link in mid-2013:"
Action 1: Address the tax challenges of the digital economy
Action 2: Neutralise the effects of hybrid mismatch arrangements
Action 3: Strengthen controlled foreign company (CFC) rules
Action 4: Limit base erosion involving interest deductions and other financial payments
Action 5: Counter harmful tax practices more effectively, taking into account transparency and substance
Action 6: Prevent treaty abuse
Action 7: Prevent the artificial avoidance of the permanent establishment status
Actions 8â€“10: Assure that transfer pricing outcomes are in line with value creation
Action 11: Establish methodologies to collect and analyse data on BEPS and the actions to address it
Action 12: Require taxpayers to disclose their aggressive tax planning arrangements
Action 13: Re-examine transfer pricing documentation
Action 14: Make dispute resolution mechanisms more effective
Action 15: Develop a multilateral instrument to modify bilateral tax treaties" (ATO website)
Australia is committed to acting to address BEPS risks and is in the process of implementing recommendations from the BEPS package as follows:"
- BEPS Actions 2, 5, 8â€“10 and 3 â€“ work is well progressed
- On 7 June 2017, Australia, along with 67 other jurisdictions, signed the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent BEPS.
- Once the convention is enacted in Australia and the OECD has been informed of our completion of Australia's ratification procedures, Australia's network of double tax treaties will be automatically amended to give effect to those BEPS recommendations that need changes to treaties.
- Actions 5, 6, 13 and 14 - inclusive framework include monitoring implementation of BEPS measures, in particular the minimum standard recommendations
- Implementation of the OECD Hybrid Mismatch Rules (BEPS Action 2)
- Automatic Exchange of Information on Cross Border Arrangements (BEPS Action 5)
- Strengthening Transfer Pricing Rules (BEPS Actions 8â€“10)
- Country-by-Country Reporting (BEPS Action 13)
- Mutual agreement procedure (BEPS Action 14)