The Organization for Economic Cooperation and Development (OECD) released its long-awaited 2015 BEPS recommendations on October 5, concluding the two-year Base-Erosion and Profit Shifting (BEPS) project designed to rewrite global tax rules.

“The BEPS project needed to happen, and the OECD and G20 should be congratulated both for their hard work and for achieving high-level consensus across many issues,” said Will Morris, chair of the tax committee of the Business and Industry Advisory Committee (BIAC) to the OECD. “Moreover this high-level consensus was achieved while working to an exceptionally ambitious timetable.”

Morris added that the business community still has concerns that some of the BEPS recommendations may lead to double taxation of income, and “many important details remain to be worked out.”

For many years, the OECD has successfully promoted cross-border trade and investment by removing barriers – including significant tax barriers – to growth.  The task of the last two years has been to respond to legitimate public concern about double non-taxation.  In spite of the reservations raised, BIAC acknowledged that the BEPS process and the recommendations released today appropriately respond to those concerns.

Carol Doran Klein, USCIB’s vice president and international tax counsel, has worked closely with members, the U.S. government, BIAC and the OECD secretariat throughout the BEPS process.

In a statement released today about the 2015 BEPS package, BIAC noted two recent develops:

• The growing acceptance among countries that mechanisms for resolving tax disputes need to be significantly improved: changes to the treaty-based Mutual Agreement Procedure will be important, but the moves of some key countries towards Mandatory Binding Arbitration will bring even more substantial benefits, as the risk of double taxation would be greatly reduced.
• A potential monitoring mechanism on implementation of the BEPS recommendations to be overseen by the OECD: BIAC believes this is an important development that can help to ensure consistent application of the BEPS recommendations by countries, and we hope that business will be able to play a significant and constructive role in this monitoring process.

BIAC also welcomed the intention of G20 countries to remain part of this process for the foreseeable future, and we appreciate the commitment to ensure that the distinctive needs of developing countries will be also appropriately addressed.

The International Chamber of Commerce also released a statement today welcoming the conclusion of the BEPS project but underscoring significant implementation challenges in the near future.