Limiting Base Erosion

S. 4121. The Road to BEPS

On 5 October 2015, the OECD published the final reports of the 15 Action Items for the Action Plan on “Base Erosion and Profit Shifting (BEPS)”. Action Point 13 “Transfer Pricing Documentation and Country-by-Country Reporting” (AP13) describes revised standards for transfer pricing documentation and includes a template for country-by-country reporting. In June 2012 at the G20 leaders’ meeting, the OECD was tasked to further develop “rules regarding transfer pricing documentation to enhance transparency for tax administration, taking into consideration the compliance costs for business. The rules to be developed will include a requirement that multinational enterprises (MNEs) provide all relevant governments with needed information on their global allocation of the income, economic activity and taxes paid among countries according to a common template”. The OECD delivered the first BEPS Action Plan in February 2013 with Deliverables in 2014 and after various consultations and revision, the final reports were published.

The first part of this contribution identifies the specific requirements of AP13, the second part discusses practical issues with respect to the imp...