OECD

On October 11-12, 2016, TEI Tax Counsel Ben Shreck participated in the OECD’s Public Consultations regarding revised OECD guidance on the use of the profit split method for transfer pricing purposes and the attribution of profits to permanent establishments under the OECD’s BEPS Project. TEI’s planned intervention at the Consultation addressed profit split factors. It is expected that the OECD will issue final guidance on these two topics by the end of 2016.

On September 4, 2016, Tax Executives Institute, Inc., filed a letter with the OECD commenting on its public discussion draft regarding Revised Guidance on Profit Splits. The Institute's comments focused on the need for clear guidance regarding how the transaction profit split method of setting transfer prices should be applied in practice and the limited settings in which the method is appropriate.

On June 29, 2016, TEI filed a comment letter with the OECD regarding its request for input on Development of a Multilateral Instrument to Implement the Tax Treaty related BEPS Measures under Action 15 of the OECD’s base erosion and profit shifting (BEPS) project.

On June 16, 2015, TEI submitted comments on the OECD revised discussion draft on BEPS Action 6: Prevent Treaty Abuse. The Institute's comments focused on the need for certainty in the determination of when taxpayers will qualify for treaty benefits so businesses can plan their cross-border operations. TEI also noted, among other things, that the proposed changes to the OECD model tax convention will create taxation where none has previously existed, in contravention of the traditional purpose of tax treaties to eliminate double taxation and prevent tax evasion.

On May 28, 2015, TEI submitted comments on the OECD BEPS discussion draft Action 8: Revisions to Chapter VIII of the Transfer Pricing Guidelines on Cost Contribution Arrangements (CCAs). The Institute's comments focused on the OECD's new value-based approach to services contributed to a CCA as a departure from the OECD's current transfer pricing guidelines, along with the need for additional examples in the discussion draft, among other things.

On May 28, 2015, TEI submitted comments on the OECD revised discussion draft on BEPS Action 7: Preventing the Artificial Avoidance of PE Status. The Institute's comments focused on the need for certainty in the definition of a permanent establishment (PE) in double tax treaties so businesses can plan their operations with an accurate forecast of the amount of tax due. TEI also noted that the proposed changes to the PE definition will significantly broaden its scope and thus increase the compliance and administrative burden on taxpayers.

On April 30, 2015, TEI submitted comments on Action 3: Strengthening CFC Rules of the OECD’s BEPS project.  The Institute’s comments focused on the need for the OECD to recommended consistent CFC rules across jurisdictions to decrease the chance of double taxation arising from widespread adoption of the rules and to reduce the compliance and administrative burden on taxpayers and tax authorities, among other things. 

On April 29, 2015, TEI submitted comments regarding Action 12:  Mandatory Disclosure Rules of the OECD’s BEPS project.  The Institute recommended that the OECD adopt an objective, uniform, and limited approach to mandatory disclosure rules to limit the compliance and administrative burden on taxpayers and tax authorities alike.  TEI also recommended that the OECD ensure that the benefits of an additional international mandatory disclosure regime outweigh the costs to taxpayers, among other things.

On February 19, 2015, TEI submitted comments to the OECD regarding two new draft elements of the International VAT/GST Guidelines, entitled Guidelines on Place of Taxation for Business-to-Consumer Supplies of Services and Intangibles and Provisions on Supporting the Guidelines in Practice (Draft Guidelines). TEI's comments emphasized the benefits of a simplified registration and compliance regime for non-resident suppliers of business-to-consumer services and intangibles, as well as the importance of clear guidance from tax authorities to facilitate compliance.