UK and International Tax news

OECD Issues Further Discussion Draft On BEPS Action 6 And Treaty Abuse

Thursday 28th May 2015

The OECD has recently issued a further discussion draft on BEPS Action 6 and the prevention of treaty abuse following consultation on the first discussion paper issued in November 2014.

The first discussion draft identified 20 issues which were to be addressed as part of the follow up work on Action 6. Over 750 pages of public comments were received and a public consultation meeting was held on 22 January 2015.  At its meetings of 5/6 and 11/13 March 2015, Working Party 1 on Tax Conventions and Related Questions continued its work on these issues in the light of the comments received, agreed on how to address the majority of these issues and discussed new proposals related to some issues.

The new discussion draft reflects the conclusions and proposals resulting from that meeting, including the outcome of the discussion of a new proposal for an alternative “simplified” limitation-on-benefits (LOB) rule and on how the LOB rule should be presented in the OECD Model Tax Convention, and new proposals for treaty rules intended to address concerns related to special tax regimes and to changes to domestic law made after the conclusion of a treaty.

The discussion draft and the comments received will be discussed at the Working Party 1 meeting of 22-26 June 2015, when the Working Party will be asked to produce a final version of the Report on Action 6 that will take into account the conclusions of the follow up work done on the issues identified in the November 2014 discussion draft.

If you would like further information on the discussion draft, please contact Keith Rushen on 0207 486 2378.

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