OECD releases additional guidance on Action 4 of the BEPS Action Plan to curb international tax avoidance
The OECD recently published an updated version of the BEPS Action 4 Report (Limiting Base Erosion Involving Interest Deductions and Other Financial Payments), which includes further guidance on the design and operation of the group ratio rule, and approaches to deal with risks posed by the banking and insurance sectors.
According to the OECD, the updated report provides a further layer of technical detail to assist countries in implementing the group ratio rule. The updated report also examines regulatory and commercial requirements which constrain the ability of groups to use interest for BEPS purposes, and limits on these constraints in the banking and insurance sectors.