The Organisation for Economic Cooperation and Development (OECD) today released a progress report from the “Inclusive Framework” on base erosion and profit shifting (BEPS) that examines 53 preferential tax regimes and demonstrates that the jurisdictions continue to offer tax breaks to only substantive activities and only if they do not pose risks of harmful competition to others.
As noted in the OECD release, the report is part of ongoing implementation of Action 5 under the BEPS project. The assessments are undertaken by the Forum on Harmful Tax Practices (FHTP), comprising of the more than 120 member jurisdictions of the Inclusive Framework.
BEPS Action 5 “revamps” the work on harmful tax practices with a focus on improving transparency, including compulsory spontaneous exchange on rulings related to preferential regimes, and on requiring substantial activity for preferential regimes such as intellectual property (IP) regimes.
The report released today reflects:
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