By Julie Martin, MNE Tax
Hong Kong, Switzerland, and Mauritius are among 18 jurisdictions that now meet global “minimum standards” on harmful tax practices, the OECD announced November 23.
The minimum standards on harmful tax practices were established by OECD and G20 nations in 2015 as a result of work on the base erosion profit shifting (BEPS) plan to encourage countries to amend or abolish rules that reduce the tax base of other countries. 137 nations have pledged to adopt laws meeting these minimum standards and have agreed to be peer-reviewed on their compliance as a condition of joining the OECD-led “Inclusive Framework on BEPS.”
According to the OECD, the most recent peer review conducted by the Forum on Harmful Tax Practices (FHTP) was approved on November 16 by the Inclusive Framework. The review found that 18 more countries are now compliant.
These newly compliant countries are Aruba, Belize, Cook Islands, Curaçao, Dominica, Dominican Republic, Georgia, Hong Kong (China), Jamaica, Maldives, Mauritius, Morocco. North Macedonia. Qatar, Saint Kitts and Nevis, San Marino, Switzerland, and Tunisia, the OECD said.
The report notes that three countries deemed compliant — Jamaica, North Macedonia, and Qatar — have seven harmful tax regimes in place that are “in the process of being amended.”
The peer review updates conclusions for 49 preferential tax regimes and notes that 29 harmful tax regimes have been abolished.
Of 295 tax regimes reviewed to date, 4 have been found to be harmful, 8 are under review, and 14 harmful regimes are in the process of being eliminated or amended. According to the report, the US’s foreign-derived intangible income regime is still under review for compliance with the minimum standards for preferential tax regimes.
The report also found a United Arab Emirates regime to be not harmful. As such, all low-tax and no-tax countries assessed now meet agreed-to substance requirements.
It was also announced that the FHTP conducted a planned 2020 review of the “nexus approach” for intellectual property with respect to the “third category of assets.” These assets share features of patents and copyrighted software, even if not formally patented, and can be included in the design of an IP regime provided the taxpayer is below certain revenue thresholds.
The FHTP concluded that there is no need to revise the current nexus approach.
Julie Martin
Julie Martin is the founder of MNE Tax. She edits the publication and regularly contributes articles on new developments in cross-border business taxation.
Julie has worked as a tax journalist and editor for more than 13 years. Prior to that, she worked as an in-house tax attorney in New York. She also holds an LLM in taxation from New York University School of Law.
Julie can be reached at [email protected].
Latest posts by Julie Martin (see all)
- UN committee considers updates to model tax treaty, developing nation tax guidance - April 21, 2021
- UN Committee of Experts approves new digital tax article for model treaty - April 20, 2021
- Leaked copy of US proposal for Pillar One and Two multinational group tax reforms available - April 12, 2021
- US offers new “Pillar One” compromise plan for taxing large multinationals - April 8, 2021
- UN tax committee releases updated model treaty language on automated digital services - April 7, 2021
Too obtuse.Show some guts!This is an important issue state your position so the 99 percent of humans who aren’t uber geeks might respect(or not)your work.