CII in association with their Knowledge Partner, Deloitte released a report at the conference on ‘Base Erosion and Profit Shifting: Impact on Indian Tax Landscape’ organised by CII on 7 November, 2014 at New Delhi.
The emerging trends in global taxation have implications for India’s tax policy. The Organization for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) report reflects that current international tax standards may have not kept pace with changes in global business practices. The report was followed by the publication of the BEPS Action Plan, which reiterated that the gaps in the interaction of domestic tax rules of various countries and application of bilateral tax treaties to multi-jurisdictional arrangements have led to weaknesses in the international tax system.
In a first major step towards implementation, the OECD, in September 2014, issued final deliverables in respect of seven action items. These deliverables were finalized by creating consensus among the OECD members, its affiliates and the G20 countries.
The set of deliverables issued contain major action items such as modification to Transfer Pricing documentation – Country by Country Reporting, Taxing the Digital Economy, Prevention of Tax Treaty Abuse, Transfer Pricing on Intangibles, Steps to counter Harmful Tax Practices and Hybrid Mismatch Arrangements. Another highlight is the issue of Action Item on Multilateral Instrument which would enable the implementation of BEPS plans in a coordinated and smooth manner among countries. The OECD has indicated that the work on the above action items is almost complete and some of the remaining aspects are ‘on course’ to be completed by 2015 end.
The CII-Deloitte publication aims to explain the concepts and industry perspectives related to the BEPS initiative.