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Prague, 30. 3. 2015: The OECD and the G20 may face an uphill task in tackling tax avoidance through artificial manipulation of permanent-establishment status, says professional services network Moore Stephens.
The OECD’s BEPS Action Plan 7 aims to recommend treaty-based amendments to prevent international companies operating in a country from artificially avoiding having a permanent establishment there, thus limiting their liability to corporate tax in that country.
According to a survey in leading developed countries recently carried out by the Tax Faculty of Moore Stephens Europe, the main obstacles to the OECD Action Plan are as follows:
“Given these differences,” says Věra Jankovcová Tax Partner of Moore Stephens, “even if the OECD, the G20 and the EU are able to reach unanimous agreement in their professed attempt to create fairer taxation of multinational transactions, it will take a very long time for the necessary changes to be implemented. Furthermore, there would even in that event be no guarantee that all mismatches and planning opportunities would disappear or even that new discrepancies would not be created.”
— End of press release —
Launched in 2013, the BEPS (Base Erosion and Profit Shifting) Action Plan of the OECD (Organisation for Economic Development and Cooperation) aims to tackle tax avoidance and mitigation by multinational companies and to ensure a fairer allocation of tax revenues between the countries in which these companies operate, and is backed by the G20 and the European Union.
For more details, consult the Moore Stephens Tax Faculty report (in English, on request).
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