Register to receive Taxand’s latest opinion on topical tax news
News › Weekly Alert Article
Is your multinational BEPS proof?
The OECD’s BEPS Action Plan is designed to redefine and revolutionise the taxation of companies across the globe in developed and developing economies. Taxand South Africa discusses the effects on multinationals.
BEPS will have a substantial impact on multinational companies and the challenge for companies is to stay current with respect to changes in the various tax jurisdictions in which they operate. The main objections of the plan are:
- Developing a new set of standards designed to avoid double non-taxation
- Aligning taxing rights with substance
- Improving transparency
The issue actually lies with the tax rules themselves and businesses cannot be faulted for using the tax rules put into place by governments to their benefit. Governments are therefore responsible to revise these rules or introduce new rules.
The new transfer pricing documentation standards adopts a 3 tier approach requiring multinationals to prepare a master file, a local country file as well as the country-by-country reporting. There is a real risk that these new transfer pricing documentation requirements will overwhelm the compliance burden of taxpayers while the level of transparency could create multiple disputes.
Quality tax advice, globally
With the OECD’s timeline for implementation closing in December 2015 multinationals have a limited window of opportunity to act to ensure risks are identified and managed. Each multinational company needs to assess its position with respect to the OECD guidelines to address major concerns, detect and understand the risks and, to provide practical answers to the crucial problems.