World news
5 June 2018

OECD issues release on reviews conducted within BEPS

The Organisation for Economic Cooperation and Development (OECD) has issued a release that updates the results of preferential regime reviews conducted by the Forum on Harmful Tax Practices (FHTP) in connection with Action 5 under the Base Erosion and Profit Shifting (BEPS) initiative.

Luděk Vacík
Aneta Macháčková

The governments of individual states continue to adopt legislative measures to make their preferential tax regimes compliant with BEPS Action 5: countering harmful tax practices more effectively. FHTP published the results of its reviews on preferential tax regimes, stating that:

  • In Lithuania, Luxembourg, Singapore and Slovakia, new regimes have been designed that comply with FHTP standards, meet all aspects of transparency, exchange of information, and substantial activities; these have been found not harmful in regards to tax competition.
     
  • Four regimes, in Chile, Malaysia, Turkey and Uruguay, have been abolished or amended to remove harmful features. 
     
  • The last three regimes (one in Kenya and two in Vietnam) have been found to be outside the scope of the FHTP as they do not concern taxation of business or cross-border activities and therefore do not pose any BEPS Action 5 risk.

FHTP’s last update identifies eleven new preferential regimes, bringing the total to 175 regimes in over 50 jurisdictions. Of these, 31 regimes have been amended and for 81 regimes legislative amendments are underway and yet to be completed. 47 regimes have been determined not to pose a BEPS risk, 12 regimes are still under review and four regimes in three countries (Jordan, France and Turkey) have been found to have harmful or potentially harmful features. The harmful tax practice in France consists in a reduced rate for long-term capital gains and profits from the licensing of IP rights.

 

For more details, view an interactive map on the OECD website showing key indicators and results of the reviews in international tax matters.

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