KPMG Statement On OECD’s Final Recommendations On Base Erosion And Profit Shifting (BEPS) Initiative
NEW YORK, Oct. 5, 2015 /PRNewswire/ — The following statement is being issued today by KPMG LLP on the final recommendations released on Oct. 5 by the Organisation for Economic Co-operation and Development (OECD) on its coordinated Action Plan on Base Erosion and Profit Shifting (BEPS):
“The OECD’s final recommendations on Base Erosion and Profit Shifting (BEPS) serve as a call to action for many multinationals to focus on new transparency and reporting obligations that likely will become law in a number of countries,” 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. “It is especially important that multinational companies shift into high gear now to evaluate the potential impact of the final recommendations and prepare to comply with new rules that might be applicable to their global operations.”
“Companies throughout the world will need to pay close attention to how the demand for increased tax transparency and reporting and other BEPS recommendations will impact their organizations, particularly with regard to their reputation, financial reporting and operations,” said Corwin. “The consequences of the rule changes will present a wide range of challenges for businesses. Putting BEPS considerations high on an organization’s agenda should place it in the best position to prepare for change, help mitigate risk, and respond to the multi-year impact of the OECD initiative.”
“It remains to be seen whether the final recommendations will be implemented in a way that will be consistent with the intended consensus,” said Corwin, who, while at Treasury, served as U.S. delegate and vice chair to the OECD’s Committee on Fiscal Affairs and was actively engaged in the early stages of the BEPS initiative. “Near term, there is a significant risk of greater uncertainty and potential for increased controversy. In this regard, meaningful progress on Action Item 14, which focuses on improving access to and effectiveness of dispute resolution, will be essential. In particular, securing broad-based support for mandatory binding arbitration to resolve disputes would be a monumental and important achievement of the overall initiative.”
“While the U.S. might be slow to adopt or decide not to adopt some of the OECD recommendations, the initiative can be expected to have a significant impact on U.S. multinationals with overseas operations in jurisdictions that are early adopters,” said Corwin.
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.
