KPMG Statements on Guidance from Organisation for Economic Co-operation and Development (OECD) on 2014 Deliverables of Base Erosion and Profit Shifting (BEPS) Initiative

NEW YORK, Sept. 16, 2014 /PRNewswire/ -- The following statements are being issued today by KPMG concerning the first recommendations issued by the Organisation for Economic Co-operation and Development (OECD) on Sept. 16 on key elements of its coordinated Action Plan on Base Erosion and Profit Shifting (BEPS): 

"The OECD's initial guidance on Base Erosion and Profit Shifting (BEPS), if adopted by key OECD member countries and observers as expected, will have a significant impact on U.S. multinationals with overseas operations, whether or not the U.S. makes changes in regulations or practices as a result of the recommendations," said Manal Corwin, national leader of International Tax at KPMG LLP and former deputy assistant secretary for tax policy for international tax affairs at the U.S. Treasury Department.

"We believe that impact will not only include changes in compliance obligations, but could directly affect current operating structures in meaningful ways," Corwin added. "Companies clearly need to focus on the details of the report on the 2014 deliverables and carefully track how countries in which they operate are reacting and planning for change."

"It is also critical for companies to stay engaged or, indeed, increase their engagement with the OECD and domestic governments as the 2014 deliverables are adopted and the 2015 deliverables are developed," said Corwin. "There is a lot of political pressure on the OECD and policymakers to produce results fast. Policymakers need the input and constructive engagement of business to keep the exercise technically focused, recognize practical limitations and concerns facing businesses, and prevent unintended consequences."

Greg Wiebe, Global Head of Tax for KPMG International, said: "Clearly, today's round of guidance from the OECD on Base Erosion and Profit Shifting could have far-reaching ramifications, which could ultimately transform the international tax landscape. With this increased clarity, the real work now begins for companies around the world."

Additional information on the OECD Action Plan on Base Erosion and Profit Shifting can be found on the KPMG Institutes website and the OECD website. 

About KPMG LLP
KPMG LLP, the audit, tax and advisory firm (www.us.kpmg.com), is the U.S. member firm of KPMG International Cooperative ("KPMG International").  KPMG International's member firms have 155,000 professionals, including more than 8,600 partners, in 155 countries.

About KPMG International
KPMG is a global network of professional firms providing Audit, Tax and Advisory services. We operate in 155 countries and have more than 155,000 people working in member firms around the word. The independent member firms of the KPMG network are affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such.

Editors Note:

The OECD's project on BEPS aims to provide governments with clear international solutions for addressing the debate over the shift of taxable business income out of high-tax jurisdictions around the world and into low or no-tax jurisdictions, and the resulting issue of tax base erosion.

The BEPS Action Plan identified 15 key areas to be addressed by 2015; the plan was endorsed by the G-20 in July 2013.

The guidance issued on Sept. 16 relates to the following seven Action Items in the plan:

• The Tax Challenges of the Digital Economy
• Hybrid Mismatch Arrangements
• Harmful Tax Practices
• Tax Treaty Abuse
• Transfer Pricing of Intangibles
• Transfer Pricing Documentation and Country-by-Country Reporting
• The Feasibility of Developing a Multilateral Instrument on BEPS.

This first set of BEPS deliverables will be presented to the G-20 Meeting of Finance Ministers on Sept. 20-21 in Cairns, Australia.

SOURCE KPMG LLP