Addressing hybrid mismatch arrangements

Addressing hybrid mismatch arrangements PDF

Author: Policy and Stratgey, Inland Revenue, New Zealand

Publisher: Policy and Strategy, Inland Revenue, New Zealand

Published: 2016-09-06

Total Pages: 87

ISBN-13: 0478424361

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Hybrid mistmatch arrangements are one of the main base erosion and profit shifting (BEPS) strategies used by some large international companies to pay little or no tax anywhere in the world. The OECD developed recommendations for anti-hybrid measures in its 15 point Base Erosion and Profit Shifting (BEPS) Action Plan. This Government discussion document seeks comments on how the OECD recommendations could be implemented in New Zealand. Part I of the document describes the problem of hybrid mismatch arrangements, the case for responding to the problem, and a summary of the OECD recommendations. Part II of the document explains the OECD recommendations in greater depth and discusses how they could be incorporated into New Zealand law.

Neutralising the Effects of Hybrid Mismatch Arrangements, Action 2 - 2015 Final Report

Neutralising the Effects of Hybrid Mismatch Arrangements, Action 2 - 2015 Final Report PDF

Author: OCDE,

Publisher: OCDE

Published: 2015-10-15

Total Pages: 454

ISBN-13: 9789264241084

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This report sets out recommendations for domestic rules to neutralise the effect of hybrid mismatch arrangements and includes changes to the OECD Model Tax Convention to address such arrangements. Once translated into domestic law, the recommendations in Part 1 of the report will neutralise the effect of cross-border hybrid mismatch arrangements that produce multiple deductions for a single expense or a deduction in one jurisdiction with no corresponding taxation in the other jurisdiction. Part I of the report sets out recommendations for rules to address hybrid mismatches in respect of payments made under a hybrid financial instrument or payments made to or by a hybrid entity. It also recommends rules to address indirect mismatches that arise when the effects of a hybrid mismatch arrangement are imported into a third jurisdiction. The recommendations are supported by a commentary and examples to illustrate how they should apply. Part 2 of the report sets out proposed changes to the Model Convention that will ensure the benefits of tax treaties are only granted to hybrid entities (including dual resident entities) in appropriate cases. Part 2 also considers the interaction between the OECD Model Convention and the domestic law recommendations in Part 1.

OECD/G20 Base Erosion and Profit Shifting Project Neutralising the Effects of Hybrid Mismatch Arrangements, Action 2 - 2015 Final Report

OECD/G20 Base Erosion and Profit Shifting Project Neutralising the Effects of Hybrid Mismatch Arrangements, Action 2 - 2015 Final Report PDF

Author: OECD

Publisher: OECD Publishing

Published: 2015-10-05

Total Pages: 458

ISBN-13: 9264241132

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Addressing base erosion and profit shifting (BEPS) is a key priority of governments. In 2013, OECD and G20 countries, working together on an equal footing, adopted a 15-point Action Plan to address BEPS. This publication is the final report for Action 2.

Neutralising the Effects of Hybrid Mismatch Arrangements

Neutralising the Effects of Hybrid Mismatch Arrangements PDF

Author: Oecd

Publisher: OCDE

Published: 2014-09-16

Total Pages: 99

ISBN-13: 9789264218796

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This report sets out recommendations for domestic rules to neutralise the effect of hybrid mismatch arrangements and includes changes to the OECD Model Tax Convention to address such arrangements. Once translated into domestic law, the recommendations in Part 1 of the report will neutralise the effect of cross-border hybrid mismatch arrangements that produce multiple deductions for a single expense or a deduction in one jurisdiction with no corresponding taxation in the other jurisdiction. Part 1 of the report will be supplemented by a commentary, which will explain the recommended rules and illustrate their application with practical examples. Part 2 of the report sets out proposed changes to the Model Convention that will ensure the benefits of tax treaties are only granted to hybrid entities (including dual resident entities) in appropriate cases. Part 2 also considers the interaction between the OECD Model Convention and the domestic law recommendations in Part 1.

Hybrid Mismatch Arrangements : Interest Deductions and Other Financial Payments

Hybrid Mismatch Arrangements : Interest Deductions and Other Financial Payments PDF

Author: H. Buesching

Publisher:

Published: 2016

Total Pages:

ISBN-13:

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The OECD base erosion and profit shifting (BEPS) 15-point Action Plan contains two action points addressing aspects of financing in the broadest sense. Action 2 is intended to neutralize the effects of hybrid mismatch arrangements, and Action 4 seeks to limit base erosion involving interest deductions and other financial payments. These action points essentially concern issues regarding the allocation of taxation associated with internal group financing arrangements. However, they also address structured financing. This article examines both action points.

MLI Made Easy

MLI Made Easy PDF

Author: Kuldeep Sharma

Publisher: Kluwer Law International B.V.

Published: 2021-04-22

Total Pages: 352

ISBN-13: 9403532610

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The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI) provides an innovative approach to enable countries to swiftly modify their bilateral tax treaties in order to implement measures developed in the course of the Base Erosion and Profit Shifting (BEPS) Project. MLI, the first successfully concluded multilateral tax treaty, provides jurisdictions with the tools they need to ensure that profits are taxed where economic activities generating the profits are performed, while at the same time giving businesses greater certainty. MLI Made Easy makes it easier to get a complete grasp of this swift but complex modification process of tax treaties. This first and only self-contained book offers an unmatched article-by-article discussion of the MLI with an abundance of practical examples, diagrams, and flowcharts to make the information easier to understand and apply. Focusing on measures to combat tax evasion and abuse of tax treaties arising due to artificial avoidance of a permanent establishment status, hybrid mismatch arrangements, and other aspects of taxation, the book includes an in-depth discussion of the following and more: how specific gaps in existing bilateral tax treaties are addressed by the MLI; positions taken by selected jurisdictions and their impact on treaties; compatibility clauses, notification clauses, opting-in mechanisms, alternative provisions, and reservations; experiences in the course of implementation of the MLI; misconceptions and lingering doubts in respect of various substantive and procedural provisions of the MLI; interaction between the principal purpose test and simplified limitation on benefits; improving dispute resolution; and meaning of the phrases ‘on or after’, ‘other taxes’, and interpretational issues in entry into effect provisions. Adopted by a majority of jurisdictions worldwide, MLI preserves the tax sovereignty of its Parties and has been successful in overcoming barriers to the conclusion of a worldwide multilateral tax treaty. Because this easy-to-use book immensely facilitates understanding and application of the treaty measures developed in the course of the BEPS Project, it will be of immeasurable use to practitioners and other professionals engaging in international taxation, as well as to taxation authorities and interested academics in any part of the world.

Addressing Base Erosion and Profit Shifting

Addressing Base Erosion and Profit Shifting PDF

Author: OECD

Publisher: OECD Publishing

Published: 2013-02-12

Total Pages: 91

ISBN-13: 9264192743

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This report presents studies and data available regarding the existence and magnitude of base erosion and profit shifting (BEPS), and contains an overview of global developments that have an impact on corporate tax matters.

Neutralising the Effects of Branch Mismatch Arrangements, Action 2

Neutralising the Effects of Branch Mismatch Arrangements, Action 2 PDF

Author: Organization for Economic Development and Cooperation

Publisher: Organization for Economic Co-Operation & Development

Published: 2017

Total Pages: 0

ISBN-13: 9789264277953

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This 2017 report sets out recommendations for branch mismatch rules that would bring the treatment of these structures into line with the treatment of hybrid mismatch arrangements as set out in the 2015 Report on Neutralising the Effects of Hybrids Mismatch Arrangements (Action 2 Report). Branch mismatches arise where the ordinary rules for allocating income and expenditure between the branch and head office result in a portion of the net income of the taxpayer escaping the charge to taxation in both the branch and residence jurisdiction. Unlike hybrid mismatches, which result from conflicts in the legal treatment of entities or instruments, branch mismatches are the result of differences in the way the branch and head office account for a payment made by or to the branch. The 2017 report identifies five basic types of branch mismatch arrangements that give rise to one of three types of mismatches: deduction / no inclusion (D/NI) outcomes, double deduction (DD) outcomes, and indirect deduction / no inclusion (indirect D/NI) outcomes. This report includes specific recommendations for improvements to domestic law intended to reduce the frequency of branch mismatches as well as targeted branch mismatch rules which adjust the tax consequences in either the residence or branch jurisdiction in order to neutralise the hybrid mismatch without disturbing any of the other tax, commercial or regulatory outcomes. The annexes of the report summarise the recommendations and set out a number of examples illustrating the intended operation of the recommended rules.

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