This report includes changes to the OECD Model Tax Convention to prevent treaty abuse.
It first addresses treaty shopping through alternative provisions that form part of
a minimum standard that all countries participating in the BEPS Project have agreed
to implement. It also includes specific treaty rules to address other forms of treaty
abuse and ensures that tax treaties do not inadvertently prevent the application of
domestic anti-abuse rules. The report finally includes changes to the OECD Model Tax
Convention that clarify that tax treaties are not intended to create opportunities
for non-taxation or reduced taxation through tax evasion or avoidance (including through
treaty-shopping) and that identify the tax policy considerations that countries should
consider before deciding to enter into a tax treaty with another country.
Base Erosion and Profit Shifting (BEPS) refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity, resulting in little or no overall corporate tax being paid.