The OECD has issued a short video on its Base Erosion and Profit Shifting announcements, made yesterday, presented by Pascal St Aman, its tax director:
Because I've known Pascal for some time, and think he's a pretty decent human being, I am inclined to believe his optimism on the issues he refers to.
I'm pleased country-by-country reporting gets a mention, of course.
But let me also flag concerns. Desperate the reference to developing countries the OECD remains the rich countries' club and it is not clear how this problem is overcome by the BEPS process.
And at the other end of the extreme there is the problem of how to sell some of this to the deeply partisan US Congress, which is inclined to think the OECD a profoundly socialists body, largely because it is based in Paris, I think.
But let's for now have a moment where we hope this is a move in the right direction. There are times when you just have to believe.
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Slightly sad that the OECD don’t pay for their own bandwidth instead of utilising the free services of Google owned YouTube who they are targetting!
As I read it, the BEPS proposals are assuming the US can’t legislate its way out of a paper bag and are working round that. So, for example, if the US won’t clear up its hybrid entities then they can expect extremely withholding taxes when they invest in countries that have adopted BEPS. The question is whether the US will obstruct other countries’ implementation of BEPS…
I expect many developing nations will adopt the BEPS proposals themselves. There may be places where they’d like to go further, and they are of course free to do so.
Richard, this G20 stuff is spreading the world now and media are just quoting the communiqué text without understanding it. Please explain to the public what the current package can achieve (and what not), why country by country reporting as it has come out will not be effective, what about the arm’s length principle and all the weaknesses around it. This exactly is your field of valuable expertise, you have a highly appreciated duty.
Later