Brussels, 06/02/2015 (Agence Europe) - In Istanbul on Monday 9 and Tuesday 10 February (see related article), the OECD will brief the G20 Finance Summit of progress in its action plan on 'tax base erosion and profit shifting' (BEPS).
The OECD and the G20 have agreed on three points to enable the action plan to be implemented: - a mandate for opening negotiations on a multilateral convention (which would need to be endorsed by the G20) and BEPS measures; - rules for country-by-country reporting; - assessment criteria for deciding whether patent boxes are damaging.
Implementation of the BEPS action plan would require changes to more than 3,000 bilateral tax deals around the world. The multilateral instrument would provide states with a single tool they could use to update their various tax treaties. An ad hoc negotiating group will meet for the first time in July and hopes to have completed its work by the end of 2016.
The focus of country-by-country reporting will be on confidentiality and tax information shared between tax offices. An exemption is planned for multinationals whose consolidated annual turnover is below €750 million in their countries of residence. The new guidance requires country-by-country reporting by multinationals with a turnover of over €750 million in their countries of residence starting in 2016. They will be required to provide tax administrations with information on revenues, profits, taxes accrued and paid, along with some activity indicators. Tax administrations will begin exchanging the first country-by-country reports in 2017.
The Netherlands was the last remaining country with doubts about the patent box question, but it joined the fold last week. The final definition of 'patent boxes' is to be decided upon over the next few months. (EL)