TEI comments on BEPS Action 6: follow-up work on tax treaty abuse.

• Position: TECHNICAL SUBMISSIONS

On January 8, TEI submitted comments to the OECD regarding its BEPS Public Discussion Draft on Follow Up Work on BEPS Action 6: Preventing Treaty Abuse. TEI's comments reiterated key recommendations from the Institute's April 2014 on the same subject. These recommendations include TEI's preference for a limitation on benefits provision to police treaty abuse in the OECD model treaty, the Institute's opposition to a principal purposes test for policing such abuse, and the need for transition rules for multinational enterprises that will be impacted by the final changes to the model treaty. TEI's comments were prepared under the aegis of TEI's European Direct Tax Committee, whose chair is Nick Hasenoehrl. Benjamin R. Shreck, TEI Tax Counsel, coordinated the preparation of TEI's comments.

On July 19, 2013, the OECD published an Action Plan on Base Erosion and Profit Shifting (hereinafter the Plan) setting forth 15 actions the OECD will undertake to address a series of issues that contribute to the perception that individual countries' tax bases are being eroded or profits shifted improperly. Pursuant to Action 6 of the Plan "Prevent treaty abuse," the OECD issued a public discussion draft on November 21, 2014 entitled Follow Up Work on BEPS Action 6: Preventing Treaty Abuse (hereinafter the Discussion Draft or Draft). The Draft follows on the OECD's first public discussion draft under BEPS Action 6 released on March 14, 2014, and requests additional input on various issues after the release in September 2014 of the OECD's report on BEPS Action 6 regarding Preventing the Granting of Treaty Benefits in Inappropriate Circumstances (the Report).

The OECD requested comments on the Discussion Draft no later than January 9, 2015. On behalf of Tax Executives Institute, Inc. (TEI), I am pleased to respond to the OECD's request for comments on the Draft.

TEI Background

TEI was founded in 1944 to serve the needs of business tax professionals. Today, the organisation has 56 chapters in Europe, North and South America, and Asia. (1) As the preeminent association of in-house tax professionals worldwide, TEI has a significant interest in promoting tax policy, as well as the fair and efficient administration of the tax laws, at all levels of government. Our nearly 7,000 individual members represent over 3,000 of the largest companies in the world.

TEI Comments

TEI submitted comments to the OECD regarding preventing treaty abuse in response to the issuance of...