OECD/G20 Base Erosion and Profit Shifting Project Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, Action 4 - 2016 Update Inclusive Framework on BEPS

OECD/G20 Base Erosion and Profit Shifting Project Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, Action 4 - 2016 Update Inclusive Framework on BEPS
Author: OECD
Publisher: OECD Publishing
Total Pages: 212
Release: 2016-12-22
Genre:
ISBN: 9264268332

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The 2015 Report on BEPS Action 4 established a common approach which directly links an entity’s net interest deductions to its level of economic activity, based on taxable EBITDA. Further work on two aspects of the common approach was completed in 2016 and this is included in this update.

Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, Action 4 - 2016 Update

Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, Action 4 - 2016 Update
Author: Organization for Economic Cooperation and Development
Publisher: Organization for Economic Co-Operation & Development
Total Pages: 0
Release: 2016-12-15
Genre: Corporations
ISBN: 9789264268326

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The 2015 Report established a common approach which directly links an entity's net interest deductions to its level of economic activity, based on taxable earnings before interest income and expense, depreciation and amortisation (EBITDA).

Interest Deductibility

Interest Deductibility
Author: Craig Elliffe
Publisher:
Total Pages: 28
Release: 2017
Genre:
ISBN:

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The Organisation for Economic Co-operation and Development (OECD) released the Final Report on Limiting Base Erosion Involving Interest Deductions and other Financial Payments (better known as Action 4, it was subsequently updated in late 2016). This Report recommended that countries adopt thin capitalisation regimes to allow interest expense on debt funding based on a proportion (fixed ratio) of earnings. For example, the rule would only permit an entity to deduct net interest expense up to a benchmark of net interest as a proportion of earnings before interest, taxes, depreciation and amortisation (EBITDA). The benchmark ratio suggested only permits interest deductions of an amount of 10 to 30 per cent of EBITDA. Should New Zealand adopt the OECD's suggestion? This article evaluates the OECD's proposal against the existing New Zealand thin capitalisation regime which currently operates on the basis of the entity's balance sheet. This assets-based regime looks at the level of debt and compares this to total assets. In assessing the respective merits of the proposal against the existing regime the article uses key principles set out by the Tax Working Group when it carefully examined the New Zealand tax system in 2010. The conclusion reached is that, contrary to the strong recommendation in the OECD's Report, there is no compelling case for change to an earnings-based EBITDA method. The article goes on to suggest a mechanism to deal with particular problems identified with “high priced debt” suggesting an interest rate cap as an alternative.

OECD/G20 Base Erosion and Profit Shifting Project Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, Action 4 - 2015 Final Report

OECD/G20 Base Erosion and Profit Shifting Project Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, Action 4 - 2015 Final Report
Author: OECD
Publisher: OECD Publishing
Total Pages: 120
Release: 2015-10-05
Genre:
ISBN: 9264241175

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Addressing base erosion and profit shifting (BEPS) is a key priority of governments. In 2013, OECD and G20 countries, working together on an equal footing, adopted a 15-point Action Plan to address BEPS. This publication is the final report for Action 4.

Limiting Base Erosion

Limiting Base Erosion
Author: Erik Pinetz
Publisher:
Total Pages: 548
Release: 2017
Genre: International business enterprises
ISBN: 9783707337587

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A Comparison of the OECD BEPS Actions 2, 3 and 4 and the Corresponding EU Anti-tax Avoidance Measures and Their Compatibility with the EU Fundamental Freedoms

A Comparison of the OECD BEPS Actions 2, 3 and 4 and the Corresponding EU Anti-tax Avoidance Measures and Their Compatibility with the EU Fundamental Freedoms
Author: V. Holmia-Junnila
Publisher:
Total Pages: 70
Release: 2016
Genre:
ISBN:

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This thesis aims to provide an overview of any material differences between the OECD base erosion and profit shifting (BEPS) Action 2 (neutralising the effects of hybrid mismatch arrangements), Action 3 (designing effective controlled foreign company rules) and Action 4 (limiting base erosion involving interest deductions and other financial payments) on one side and the measures taken by the European Union, in particular articles 4, 7, 8 and 9 of the Anti-Avoidance Directive adopted by the Council on 12 July 2016. The thesis also provides an assessment on the compatibility of these measures with the EU right of free movement.

Corporate Taxation, Group Debt Funding and Base Erosion

Corporate Taxation, Group Debt Funding and Base Erosion
Author: Gianluigi Bizioli
Publisher: Kluwer Law International B.V.
Total Pages: 386
Release: 2020-02-07
Genre: Law
ISBN: 9403512318

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The EU’s Anti-Tax Avoidance Directive (ATAD), implemented in January 2019, confronts Member States with complex challenges, particularly via the introduction of an interest limitation rule. This timely book, the first in-depth analysis of the features and implications of the directive, provides insightful and practical discussions by experts from around Europe on the crucial interactions of the ATAD with other existing anti-tax avoidance measures, the European financial sector and the fundamental freedoms. Specific issues and topics covered include the following: relation with the OECD’s Base Erosion and Profit Sharing project (BEPS) and the EU’s Common Corporate Tax Base initiative; technical subjects relating to corporate taxation and debt funding; problems caused by the diametrically opposite tax treatment of debt and equity within a group of companies; exclusion clauses for interest expenses; and interplay between interest limitation rules and anti-hybrid rules. A comparative analysis of implementation issues in four leading Member States—Germany, Italy, Spain and The Netherlands—as well as a global general survey with regard to interest limitation rules allow readers to assess the particular complexities associated to the implementation of the ATAD. This matchless commentary by leading European tax law academics and practitioners on an important and much-debated item of EU legislation gives practitioners, enterprises and tax authorities an early opportunity to understand the practical effects of the directive in the various Member States.

Action Plan on Base Erosion and Profit Shifting

Action Plan on Base Erosion and Profit Shifting
Author: OECD
Publisher: OECD Publishing
Total Pages: 44
Release: 2013-07-19
Genre:
ISBN: 9264202714

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This action plan, created in response to a request by the G20, identifies a set of domestic and international actions to address the problems of base erosion and profit sharing.

The Oxford Handbook of International Tax Law

The Oxford Handbook of International Tax Law
Author: Florian Haase
Publisher: Oxford University Press
Total Pages: 1185
Release: 2023-09-22
Genre: Law
ISBN: 0192652338

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International Tax Law is at a turning point. Increased tax transparency, the tackling of Base Erosion and Profit Shifting (BEPS), the reconstruction of the network of bilateral tax treaties, the renewed discussion about a fair and efficient allocation of taxing rights between States in a global, digitalized economy, and the bold push for minimum corporate taxation are some expressions of this shift. This new era also demonstrates the increased influence of international standard setters such as the OECD, the UN, and the EU. Each of these developments alone has the potential of being disruptive to the traditional world of international tax law, but together they have the potential to reshape the international tax system. The Oxford Handbook of International Tax Law provides a comprehensive exploration of these key issues which will shape the future of tax law. Divided into eight parts, this handbook traces the history of international tax law from its earliest days until the present, including reflections on the developments that have characterized the last one hundred years. The second section places tax law within the broader international context considering how it relates to public and private international law, as well as corporate, trade, and criminal law. Sections three and four consider key legal principles and issues such as regional tax treaty models, OECD dispute resolution, and transfer pricing versus formulary apportionment. Subsequent analysis places these issues within their European and cross-border contexts providing an assessment of the role of the ECJ, state aid, and cross-border VAT. Section seven broadens the scope of this analysis, asking how trends in recent major economies and regions have helped shape the current outlook. The final section considers emerging issues and the future of international tax law. With over sixty authors from 28 different countries, the Oxford Handbook of International Tax Law is an invaluable resource for scholars, academics, and practitioners alike.

A Guide to the Anti-Tax Avoidance Directive

A Guide to the Anti-Tax Avoidance Directive
Author: Werner Haslehner
Publisher: Edward Elgar Publishing
Total Pages: 340
Release: 2020-06-26
Genre: Law
ISBN: 178990577X

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This book provides a concise, practical guide to the European Union’s Anti-Tax Avoidance Directive (ATAD). Presenting unique insights into the ATAD’s five specific anti-avoidance rules, its chapters explain the background of those rules, the directive’s interactions with relevant jurisprudence, and the challenges posed to the ATAD’s interpretation and implementation in domestic law.