Base Erosion and Profit Shifting (BEPS)

I. S. 272Background and OECD Developments

Already in the OECD BEPS Report, the effectiveness of current anti-avoidance measures was identified as a “key pressure area”. Subsequently, in July 2013, the OECD published an Action Plan on Base Erosion and Profit Shifting (BEPS Action Plan), in which treaty abuse and, in particular, treaty shopping have been identified as one of the most important sources for BEPS concerns. In this regard, focus of the recommendations under Action 6 of the Action Plan is to “develop model treaty provisions and recommendations regarding the design of domestic rules to prevent the granting of treaty benefits in inappropriate circumstances”. On the basis of this aim, in September 2014, the OECD published the Action 6 Deliverable on preventing the granting of treaty benefits in inappropriate circumstances. Generally, the Action 6 Deliverable elaborates on three concrete actions, namely: