The Romanian government, on June 2, announced that it will join countries working on the next phase of the OECD/G20 base erosion and profit shifting (BEPS) project as an associate, developing standards and monitoring the implementation of BEPS international tax measures, which are designed to combat multinational corporation tax avoidance.
“The Government has approved today, by a Memorandum, Romania’s accession as associate to the BEPS Implementation Forum, which will allow our country’s participation in the measures on combating the tax base erosion and profit shifting, and their implementation on the national soil,” the Romanian government said in a release.
The framework for BEPS project implementation, announced publicly by the OECD in February and later endorsed by G20 finance ministers, allows any country to participate in further BEPS work under the framework’s mandate if the country agrees to pay an annual fee and adopt the BEPS project minimum standards on harmful tax practices (action 5), treaty abuse (action 6), country-by-country reporting (action 13), and dispute resolution (action 14).
This means that, to participate, countries would need to agree to fully implement the mutual agreement procedure (MAP) in their tax treaties and resolve MAP cases in a timely fashion; add language to their tax treaties to prevent treaty shopping; limit benefits of any intellectual property or other preferential tax regime based on an agreed method that requires substantial activity; and follow the OECD/G20 agreement on country-by-country reporting for transfer pricing. The annual fee would be based on the the country’s economic circumstances.
The first meeting of the new BEPS framework will take place in Kyoto, Japan, on June 30–July 1.
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