28 july 2016 - BEPS action 4 - discussion draft on approaches to address beps involving interest in the banking and insurance sectors. The report on Action 4, Limiting Base Erosion Involving Interest Deductions and Other Financial Payments, establishes a common approach to tackling BEPS involving interest, but highlights a number of factors which suggest that a difference approach may be needed to address risks posed by entities in the banking and insurance sectors.
These include the fact that banks and insurance companies typically have net interest income rather than net interest expense, the different role that interest plays in banking and insurance compared with other sectors, and the fact that banking and insurance groups are subject to regulatory capital requirements that restrict the ability of groups to place debt in certain entities.
The Report therefore provides at paragraphs 188 to 190 that countries may exclude entities in banking and insurance groups, and regulated banks and insurance companies in non-financial groups, from the scope of the fixed ratio rule and group ratio rule, with work to be conducted in 2016 to identify approaches suitable for addressing the BEPS risks posed by these sectors, taking into account their particular characteristics.
This discussion draft has been produced as part of the follow-up work on this issue, which focuses on -
- the risks posed by banking and insurance groups to be addressed under Action 4,
- approaches to address risks posed by banks and insurance companies, and
- approaches to address risks posed by entities in a group with a bank or insurance company.
The discussion draft includes a number of specific questions (which appear in boxes) related to particular aspects of these topics. The CFA invites interested parties to send written responses to these questions, in order to facilitate the analysis of the issues covered by the discussion draft.
Table of Contents of Tax Transparency
- Tax transparency: an UK example
- Transfer pricing: surviving the new tax world
- Transfer Pricing and Customs Valuation
- BEPS 2015 Final Reports
- International Taxation and Tax Rulings: Policy Issues at Challenging Times (TAXE2)
- EU - State aid - DG Competition – Internal Working Paper
- EU - Overview of the European Parliament's initiatives on taxation
- EU - Anti Tax Avoidance Package
- EU - Public consultation on further corporate tax transparency
- EU - Introducing public country-by-country reporting for multinational enterprises
- EU - Re-launch of the Common Consolidated Corporate Tax Base (CCCTB)
- EU - TAXE II committee report - Tax Challenges in the Digital Economy
- EU - adopts new corporate tax avoidance rules (12 July 2016)
- Fighting effectively against tax cheating, devious tax avoidance and money laundering
- OECD - Actions needed to advance global tax transparency
- OECD - Global tax and transparency
- EU - Accounting Directive - CbC reporting / tax transparency
- Draft report on tax rulings and other measures similar in nature or effect for European Parliament
- UK - Tax administration: large businesses transparency strategy
- UK - HMRC publishes tax strategy guidance
- Australia targets businesses that shift profits offshore
- Examples of public tax transparency statements
- The Tax Transparency Benchmark 2015
- BEPS and indirect tax