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Erosion and Profit Shifting (BEPS) – OECD Action Plan

Thursday, 08 August 2013   (0 Comments)
Posted by: Author: KPMG
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Author: KPMG

In February 2013, the Organisation for Economic Cooperation and Development (OECD) published a report, Addressing Base Erosion and Profit Shifting, in which it stated the view represented by the OECD member countries on the matter.

The OECD clarified in this report that base erosion constitutes a serious risk to tax revenues, tax sovereignty and tax fairness for OECD member countries and non-members alike. While there are many ways in which domestic tax bases can be eroded, a significant source of base erosion is profit shifting.

Following the February report, as well as discussions with stakeholders on 19 July 2013, the OECD then released its BEPS Action Plan, setting out 15 actions to be taken and proposing significant changes to the OECD Transfer Pricing Guidelines, the OECD Model Tax Convention, but also to domestic legislation. The proposed changes will affect corporate tax, international tax, including CFC, and indirect tax legislation.

The proposed changes appear to be very ambitious considering the tight timeframe proposed, however, it is noted that the initiative has received a lot of support so far.

Download the summary of the action steps proposed by the OECD and the suggested timing for implementation as well as the expected output for each step here:



Section 240A of the Tax Administration Act, 2011 (as amended) requires that all tax practitioners register with a recognized controlling body before 1 July 2013. It is a criminal offense to not register with both a recognized controlling body and SARS.

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