24/01/2022 – Progress continues in combatting harmful tax practices and providing greater tax certainty. New outcomes on the review of preferential tax regimes and new peer review reports on Mutual Agreement Procedures have been approved by the OECD/G20 Inclusive Framework on BEPS, which groups over 140 countries and jurisdictions on an equal footing for multilateral negotiation of international tax rules.

 

Preferential regimes (BEPS Action 5)

At its November 2021 meeting, the Forum on Harmful Tax Practices (FHTP) agreed new decisions on 9 preferential tax regimes as part of the implementation of the BEPS Action 5 minimum standard, bringing the total number of reviewed regimes since the start of the BEPS Project to 317.

 

The FHTP concluded on regimes as follows: Two newly introduced regimes were concluded as “not harmful” (Hong Kong (China) and Lithuania). Two regimes are abolished (Mauritius). In addition, Qatar amended its three preferential regimes to be in line with the standard and therefore, these regimes are “not harmful (amended)”. Costa Rica made a commitment to amend recent legislative changes that were made to its Free trade zone regime and therefore, regime is now “in the process of being amended”. Finally, one new regime is now under review (Albania).

 

More information on the BEPS Action 5 on harmful tax practices can be found at https://oe.cd/bepsaction5

 

Mutual Agreement Procedure (BEPS Action 14)

The Stage 2 peer review monitoring reports of the BEPS Action 14 minimum standard evaluate the progress made by Brunei Darussalam, Curaçao, Guernsey, Isle of Man, Jersey, Monaco, San Marino and Serbia in implementing recommendations resulting from their Stage 1 peer review. They take into account any developments in the period 1 April 2019 – 31 December 2020 and build on the Mutual Agreement Procedure (MAP) statistics for 2016-2020. Highlights include:

• The Multilateral Instrument was signed by Curaçao, Guernsey, Isle of Man, Jersey, Monaco, San Marino and Serbia. It has already been ratified by all of them, which brings a substantial number of their treaties in line with the Action 14 minimum standard. In addition, there are bilateral negotiations either ongoing or concluded.
• Brunei Darussalam, Curaçao, Guernsey, Isle of Man, Jersey, Monaco and San Marino now have a documented bilateral notification/consultation process that they apply in cases where an objection is considered as being not justified by their competent authority.
• Curaçao, Guernsey, Isle of Man, Jersey and Serbia closed MAP cases within the pursued average time of 24 months, whereas the remaining jurisdictions had no MAP experience.
• Brunei Darussalam, Curaçao, Guernsey, Isle of Man, Monaco and San Marino ensure that MAP agreements can always be implemented notwithstanding domestic time limits.
• All of the concerned jurisdictions have issued or updated their MAP guidance.

 

The OECD will continue to publish Stage 2 peer review reports in batches in accordance with the Action 14 peer review assessment schedule. In total, 82 Stage 1 peer review reports and 60 Stage 1 and Stage 2 peer monitoring reports have now been published, with the ninth batch of Stage 2 reports to be released in a few months.

 

More information on the BEPS Action 14 Mutual Agreement Procedure can be found at https://oe.cd/bepsaction14

 

Media queries should be directed to Pascal Saint-Amans, Director of the OECD Centre for Tax Policy and Administration (+33 1 45 24 91 08), or Achim Pross, Head of the International Co-operation and Tax Administration Division (+33 1 45 24 98 92).

 

Update 25/01/2022: The text has been corrected to say "Albania" (instead of "Armenia") as the one new regime under review.