OECD: Countries bring preferential tax regimes in line with international standards

The Forum on Harmful Tax Practices accepted new conclusions on 25 regimes as part of the implementation of the BEPS Action 5 minimum standard.

The Forum on Harmful Tax Practices accepted new conclusions on 25 regimes.

The Organisation for Economic Cooperation and Development (OECD) today announced:

Progress continues in combatting harmful tax practices as new outcomes on the review of preferential tax regimes have been approved by the OECD/G20 Inclusive Framework on BEPS, which groups 139 countries and jurisdictions on an equal footing for multilateral negotiation of international tax rules.

According to a related OECD release, the Forum on Harmful Tax Practices in April 2021 accepted new conclusions on 25 regimes as part of the implementation of the BEPS Action 5 minimum standard.

  • The Australian offshore banking regime has now been repealed, with grandfathering provided to existing taxpayers within approved timelines.
  • The Philippines will repeal its regional operating headquarters regime as of 1 January 2022 (without grandfathering) and is "potentially harmful but not actually harmful" for the time being.
  • The United States confirmed its intention to repeal the foreign-derived intangible income (FDII) regime, which has therefore been classified as "in the process of being eliminated.”
  • The governments of the Dominican Republic, Gabon, Sint Maarten, and Jordan made commitments for six other regimes that are now "in the process of being amended/eliminated.”
  • Trinidad and Tobago was not able to fulfil its commitment to repeal its special economic zone regime within the agreed timelines, and it is now considered "harmful.” 
  • Two newly introduced regimes—in Hong Kong and Georgia—were concluded as being "not harmful."
  • Twelve regimes are under review for the first time (Armenia, Eswatini, Honduras, Lithuania, and Pakistan).

 

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