Permanent establishment and the BEPS project (action 7): perspectives in evolutionINTERTAX, 2019
Aggressive tax strategies pursued by global actors and aimed at minimizing the tax burden across the board are often compounded with a new phenomenon that in 2013 has been denominated by the OECD as “base erosion and profit shifting” (Beps). The OECD and G20 countries adopted in July 2013 a 15-point Action Plan to address Beps (hereinafter the the ‘Beps Project’) with the aim to create consensus-based international tax rules. In 2014-2015 the OECD has issued fifteen reports in the context of the overall Beps project. In 2016 a Multilateral Instrument (hereinafter the ‘MLI’) has been issued and in 2017 the Commentary to the OECD Model Tax Convention on Income and on Capital (hereinafter respectively the ‘Commentary’, and the ‘Model’ or ‘Convention’ ) have been released. The changes advocated by the Beps project to the OECD Model Tax Convention to become directly binding require amendments to or renegotiations of thousands of bilateral treaties currently in existence. This creates a real issue in terms of timing because such process of renegotiation is time-consuming and uncertain. To address this problem the MLI is ultimately aimed at implementing the Beps treaty-related measures and amend bilateral tax treaties.