BEPS and Indirect Tax

Although the OECD BEPS project is primary aimed at corporate income tax, the indirect tax implications should not be overlooked.

International tax issues have never been higher on the political agenda than they are today. In an increasingly interconnected world, national tax laws have not kept up with globalizing businesses and tax policymakers believe that this has left gaps and mismatches in international tax laws that can be exploited to generate double non-taxation.

In this context, the Organisation for Economic Co-operation and Development (OECD) and G20 countries have worked closely to combat base erosion and profit shifting (BEPS) by addressing the root causes, not just the symptoms. The project entailed forging consensus on 15 Actions that combine to create a broad package of tax measures designed for coordinated implementation by participating countries domestically and through treaty provisions, supported by targeted monitoring and strengthened transparency. In November 2015, the G20 leaders endorsed the OECD’s final BEPS recommendations as well as the OECD International VAT/GST Guidelines.

Although the BEPS project is aimed primarily at corporate income tax, the indirect tax implications should certainly not be overlooked. To help organizations better understand the BEPS impacts on indirect tax, a new article by KPMG’s Global Indirect Tax Services explores:

the BEPS Action (Action 1) that directly addresses VAT
the BEPS Actions that do not address VAT but will directly affect VAT
the BEPS Actions that may have indirect VAT effects

BEPS Action that directly addresses VAT