36 non-OECD, non-G20 countries join BEPS international tax effort

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Thirty-six countries and jurisdictions that are neither OECD nor G20 members have joined the framework to implement the OECD/G20 base erosion profit shifting (BEPS) project to combat multinational tax avoidance, and 21 more are expected to join in the coming months, according to a June 30 OECD announcement.

The commitment means that the countries have agreed follow OECD/G20 BEPS minimum standards, namely, to add language to their tax treaties to prevent treaty shopping; join OECD/G20 agreements on country-by-country reporting for transfer pricing; limit benefits of intellectual property or other preferential tax regime based on an agreed method that requires substantial activity; and fully implement the mutual agreement procedure (MAP) in their tax treaties by resolving MAP cases within an average of 24 months, funding MAP administration, and ensuring that qualified taxpayers have access to MAP. The countries must also pay a fee to participate.

In return, the countries are allowed to work alongside OECD and G20 members on the framework’s mandate, which includes completion of some remaining standard setting work in the area of transfer pricing and interest deductibility; developing guidance to ensure the consistent implementation of the four minimum standards which will be subject to a peer review process; participating in ongoing data gathering on the tax challenges of the digital economy; and measuring the impact of BEPS.

Twenty-two of the non-OECD, non-G20 countries are attending the first meeting to implement BEPS, being held June 30–July 1 in Koyoto, Japan, the OECD said. The meeting has drawn representatives of more than 80 countries.

The new, non-OECD, non-G20 members are:

Aruba, Bangladesh, Benin, Brunei Darussalam, Bulgaria, Burkina Faso, Cameroon, Congo, Croatia, Curaçao, Democratic Republic of the Congo, Egypt, Eritrea, Gabon, Georgia, Guernsey, Haiti, Hong Kong (China), Isle of Man, Jersey, Kenya, Liberia, Liechtenstein, Malta, Monaco, Nigeria, Pakistan, Papua New Guinea, Paraguay, Romania, San Marino, Senegal, Sierra Leone, Singapore, Sri Lanka, and Uruguay.