The OECD released its first tranche of recommendations on the BEPS Project last month. Minister for Finance, Michael Noonan, welcomed the reports and noted Ireland’s active involvement in all aspects of the BEPS discussions.

Minister Noonan also noted that Ireland in particular agrees with the conclusion of the report on the digital economy that this sector should not be ring-fenced from the economy as a whole. This conclusion echoes that of the European Commission’s expert group released earlier this year.

The BEPS initiative is designed to create a single set of international tax rules to end the erosion of tax bases and the artificial shifting of profits to jurisdictions to avoid paying tax. The first 7 elements of the Action Plan released by the OECD focus on helping countries to:

• ensure the coherence of corporate income taxation at the international level, through new model tax and treaty provisions to neutralise hybrid mismatch arrangements (Action 2);
• realign taxation and relevant substance to restore the intended benefits of international standards and to prevent the abuse of tax treaties (Action 6);
• assure that transfer pricing outcomes are in line with value creation, through actions to address transfer pricing issues in the key area of intangibles (Action 8);
• improve transparency for tax administrations and increase certainty and predictability for taxpayers through improved transfer pricing documentation and a template for country-by-country reporting (Action 13);
• address the challenges of the digital economy (Action 1);
• facilitate swift implementation of the BEPS actions through a report on the feasibility of developing a multilateral instrument to amend bilateral tax treaties (Action 15); and
• counter harmful tax practices (Action 5).