Tax officials that attended an OECD Eurasia regional meeting on base erosion and profit shifting (BEPS) welcomed the OECD’s effort to involve developing nations in the BEPS project, but said that barriers prevent nations in the region from participating, according to a report released March 10. These barriers were apparent as representatives of only six nations attended the regional meeting, held in Ankara, Turkey, on March 5-6.
The meeting was the OECD’s fourth regional meeting on BEPS. Meetings have already been held covering the South East Asia region, the Latin America and the Caribbean regions, and with Francophone countries. The meetings are part of an OECD effort to respond to a G20 request to deepen the engagement of developing nations in the BEPS process.
Meeting attendees said the OECD dialogue on BEPS presents a challenge to developing nations because of the lack of personnel with necessary language and technical skills and because of financial and administrative burdens, such as the costs of traveling to international meetings, according to a report prepared by meeting co-chairs Ahmet Kurt from Turkey and Valerio Barbantini from the OECD.
Nonetheless, attendees were grateful for the opportunity to be included in the process.
Meeting participants said that their top BEPS concerns were excessive related party interest deductions, artificial avoidance of permanent establishment status, and transfer pricing, according to the co-chair report. Attendees also cited a need for a coordinated approach to tax incentives.
Participants welcomed the increased transparency provided by country-by-country reporting but “expressed concerns about the balance between availability of this risk-assessment tool and the protection of taxpayer confidentiality,” the report said.
Participants said it is of critical importance to develop the capacity of partner countries to implement BEPS, particularly through the development of toolkits and training.
Discussion also addressed further steps to be taken to engage the region in the BEPS process.
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