On July 19, 2013, the Organisation for Economic Co-operation and Development (the OECD) issued its Action Plan regarding Base Erosion and Profit Shifting (BEPS) at the G20 leadership meeting of finance ministers in Moscow. Following a call from G20 leaders to address base erosion and profit shifting, the Action Plan addresses the perceived flaws in international tax and transfer pricing rules that were discussed in the OECD's February 2013 BEPS Report (see PKN dated February 13, 2013). The main thrust of the Action Plan is a proposal of 15 separate action points. The OECD states that "fundamental changes are needed to effectively prevent double non-taxation" which, the OECD argues, is harmful to governments, individual taxpayers, and large and small businesses.
The 15 action points regard transparency and disclosure actions, treaty-related actions, and permanent establishment (PE) and transfer pricing actions. This publication will focus on the transfer pricing aspects of the Action Plan.