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OECD Reports Solid Progress On BEPS Action 5 And 14

by Ulrika Lomas, Tax-News.com, Brussels

16 February 2022


The OECD/G20 Inclusive Framework on BEPS has published the outcome of more reviews into territories' preferential tax regimes and on tax dispute resolution through the Mutual Agreement Procedure.

The OECD said the findings demonstrate that countries are continuing to make progress on combating harmful tax practices and providing greater tax certainty to large taxpayers.

The findings of reviews into nine preferential tax regimes have been published, as part of the work on the implementation of BEPS Action 5. The number of regimes reviewed now stands at 317.

The Forum on Harmful Tax Practices, meeting last in November 2021, has concluded that two newly introduced regimes, introduced in Hong Kong (China) and Lithuania, are "not harmful." In addition, two regimes that were subject to scrutiny have been abolished in Mauritius, and Qatar amended its three preferential regimes to be in line with the standard and, therefore, these regimes are now considered "not harmful".

Costa Rica has made a commitment to amend recent legislative changes that were made to its free trade zone regime. Therefore, the status assigned to this regime is now "in the process of being amended".

One new regime is now under review in Armenia concerning free economic zones.

On tax dispute resolution, under BEPS Action 14, new Stage 2 peer review monitoring reports have been released for Brunei Darussalam, Curacao, Guernsey, Isle of Man, Jersey, Monaco, San Marino and Serbia. These look at progress the territories have made in implementing recommendations resulting from their Stage 1 peer review. According to the OECD, the findings are resoundingly positive. Highlights include:

  • The Multilateral Instrument was signed by Curacao, Guernsey, the Isle of Man, Jersey, Monaco, San Marino, and Serbia. It has already been ratified by all of them, which brings a substantial number of their treaties in line with the Action 14 minimum standard. In addition, there are bilateral negotiations either ongoing or concluded;
  • Brunei Darussalam, Curacao, Guernsey, the Isle of Man, Jersey, Monaco and San Marino now have a documented bilateral notification/consultation process that they apply in cases where an objection is considered as being not justified by their competent authority;
  • Curacao, Guernsey, the Isle of Man, Jersey, and Serbia closed MAP cases within the pursued average time of 24 months, whereas the remaining jurisdictions had no MAP experience;
  • Brunei Darussalam, Curacao, Guernsey, the Isle of Man, Monaco, and San Marino ensure that MAP agreements can always be implemented notwithstanding domestic time limits; and
  • All of the concerned jurisdictions have issued or updated their MAP guidance.

TAGS: Isle of Man | tax | Brunei | Mauritius | Armenia | China | Guernsey | Jersey | Monaco | Qatar | Serbia | agreements | transfer pricing | Costa Rica | Hong Kong | G20 | trade | Lithuania | San Marino | Tax | BEPS

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