BEPS Final Reports: An Update On Treaty Shopping

The Organisation for Economic Co-operation and Development (OECD) sees treaty shopping as an important source of Base Erosion and Profit Shifting (BEPS). In this context, it identified the prevention of treaty abuse as one of fifteen issues or "actions" in respect of which recommendations were to be formulated as part of its Action Plan on BEPS, released in July 2013 (Action 6).^[1] Following a two-year consultation process between the OECD and G20, the OECD presented final reports with respect to its BEPS project on October 5, 2015. This article provides an overview of the consensus that was reached between the OECD and G20 with respect to Action 6.

Context

Building upon a preliminary discussion draft released in March 2014, the OECD published a package of initial proposals with respect to the prevention of treaty shopping and treaty abuse strategies in September 2014 (2014 Report).^[2] The 2014 Report was promptly followed in November 2014 by a list of 20 issues