The organisation for Economic Cooperation and Development (OECD) published a package of measures from its Action Plan on Base Erosion and Profit Shifting (BEPS) in October. The package provides a comprehensive reform of the international tax framework with recommendations to address concerns identified by the OECD in its 15-point action plan of July 2013.
Thirteen reports have been published. The reports are divided into three categories for implementation by OECD countries:
Now that the reports have been published, the focus over 2015 and 2016 will be on the implementation of these measures. Countries will be introducing changes to their domestic law and there will be changes to multilateral tax instruments to underpin the BEPS proposals.
From an Irish perspective the minister has announced certain measures in Budget 2015 including the introduction of a new Knowledge Development Box (KDB), which is in line with OECD parameters for patent boxes.
KDB will provide an effective tax rate for intellectual property income that is below the normal headline rate of corporation tax with the aim of encouraging companies to locate high-value jobs associated with the development of intellectual property in Ireland.
In addition the minister has announced the introduction of the country-by-country reporting framework.
This requires certain multi-nationals to provide information on their revenues, profits and taxes together with indicators of activity in each jurisdiction.
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