UN handbook on tax avoidance includes new chapters on rents, royalties, GAAR

The UN has published the second edition of the United Nations Handbook on Selected Issues in Protecting the Tax Base of Developing Countries, updating the manual and adding new chapters on general antiabuse rules (GAARs) and on base-eroding payments of rents and royalties.

The 796-page document is a compilation of articles written by leading thinkers in international tax. It is designed to be a reference source for developing nations that seek to broaden their tax base and fight tax avoidance by multinational groups operating in their countries. The handbook comments on the action items addressed in the 2015 OECD/G20 base erosion profit shifting (BEPS) plan final reports that are of the greatest interest to developing nations and discusses other international tax topics of particular interest to these countries.

First released in 2015, the handbook has been updated to include two new chapters. A chapter on base-eroding payments of rent and royalties, written by University of Cambridge professor, Peter Harris, addresses the features of domestic income tax laws and tax treaties that give rise to BEPS risks in this context. He focuses particularly on rents and royalties giving rise to hybrid mismatches and BEPS arising from the use of intermediaries in third countries.

A new chapter on GAARs, written by Brian J. Arnold, a senior adviser with the Canadian Tax Foundation, discusses the fundamental tax policy considerations that countries should consider when designing and drafting a statutory GAAR and the major features of such legislation.

The other chapters have been updated to reflect feedback from UN Committee of Experts on International Cooperation in Tax Matters,  international and regional organizations, and stakeholders, said the UN Financing for Development Office of the United Nations Department of Economic and Social Affairs, which produced the document

The handbook’s chapters are authored by Brian Arnold, Hugh Ault, Peter A. Barnes, Graeme S. Cooper, Wei Cui, Mr. Peter A. Harris, Jinyan Li, Adolfo Martín, Jiménez, Diane Ring and  Eric Zolt.

The manual was largely funded by the government of Italy. Contributions were made by the Canadian Tax Foundation and the Canadian Branch of the International Fiscal Association.