The OECD published a new report setting out recommendations for changes to domestic law to bring the treatment of branch mismatch structures into line with outcomes set out in its 2015 report on the use of hybrid mismatch arrangements.

In October 2015, as part of the final BEPS package, the OECD/G20 published a report on Neutralising the Effects of Hybrid Mismatch Arrangements. The report sets out recommendations for domestic rules to counter the use of hybrid entities to generate multiple deductions for a single expense or deductions without corresponding taxation of the same payment. While the 2015 report addressed mismatches that are a result of differences in the tax treatment or characterisation of hybrid entities, it did not directly consider similar issues that can arise through the use of branch structures. This latest report sets out recommendations for changes to domestic law to bring the treatment of branch mismatch structures into line with outcomes described in the 2015 Report.