OECD releases BEPS discussion draft on preventing treaty abuse

The OECD on November 21 released a discussion draft under Action 6 of the OECD/G20 base erosion and profit shifting (BEPS) plan relating to preventing abuse of tax treaties.

The draft follows up on an OECD interim report, issued September 16, which reflects an agreement among countries to require minimum standards in tax treaties to prevent treaty abuse. The report states that treaties should include either a principle purposes test or a limitation on benefit rule plus conduit financing rules.

The new discussion draft requests specific feedback on a number of issues that have not yet been resolved with respect to this work. In particular, the OECD seeks assistance in drafting the limitation on benefits rule and asks for feedback regarding provisions applicable to treaty entitlement for collective investment vehicles (CIVs) and non-CIV funds.

Comments are due January 9, 2015.

See,

• Public discussion draft – follow up on work on BEPS action 6: preventing treaty abuse

• OECD release

Related MNE Tax articles:

• OECD BEPS guidance includes anti-treaty shopping rules, country-by-country reporting requirements