Base Erosion and Profit Shifting (BEPS)

I. S. 28Introduction

Base erosion and profit shifting (BEPS) is currently one of the dominant topics in international tax law. The general framework for this OECD initiative was set in the BEPS Report which was issued in February 2013. In this Report, the OECD describes the BEPS phenomenon in international taxation and identifies various key pressure areas. The next step of this initiative was set by the OECD in July 2013 with the release of the BEPS Action Plan. This Action Plan specifies 15 Actions that set the further agenda of the OECD in the BEPS initiative. Beginning in March 2014, the OECD began to publish public discussion drafts on the various BEPS Actions, and various consultations have taken place so far.

One of the main goals of the BEPS initiative is to update the OECD Model Tax Convention (OECD Model). In addition, the OECD also aims to offer recommendations for new international standards for the design of national tax law in OECD member countries. With this new development, the OECD is eager to take a central role in tax policy. Therefore, the current developments and their impacts on domestic tax laws must be carefully analysed.

This chapter concerns about a provision that...