TEI comments on revised OECD treaty abuse discussion draft.

• Position: Tax Executives Institute, Organisation for Economic Co-operation and Development

On June 16, 2015, TEI submitted comments on the OECD revised discussion draft on BEPS Action 6: Prevent Treety Abuse. The Institute's comments focused on the need for certainty in the determination of when taxpayers will qualify for treaty benefits so businesses can plan their cross-border operations. TEI also noted, among other things, that the proposed changes to the OECD model tax convention will create taxation where none has previously existed, in contravention of the traditional purpose of tax treaties to eliminate double taxation and prevent tax evasion. 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 fifteen 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 November Draft). The November Draft followed on the OECD's first public discussion draft under BEPS Action 6, released on March 14, 2014. A public consultation on the November Draft was held in January 2015. Following on the November Draft and subsequent public consultation, on May 22, 2015, the OECD released a revised discussion draft entitled BEPS Action 6: Prevent Treaty Abuse (hereinafter the Revised Discussion Draft or Revised Draft). The OECD requested comments on the Revised Draft no later than June 17, 2015. On behalf of Tax Executives Institute, Inc. (TEI), I am pleased to respond to the OECD's request for comments.

TEI Background

TEI was founded in 1944 to serve the needs of business tax professionals. Today, the organisation has fifty-six 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

General Comments

TEI commends the OECD for its exhaustive work under BEPS Action 6 as most recently reflected in the Revised Discussion Draft and its continued solicitation of stakeholder input on the rules necessary to address the issues set forth in the Revised Draft. Regrettably, the Revised Discussion Draft is a...