IMA welcomes OECD rethink on funds tax changes
The IMA has welcomed plans by the Organisation of Economic Cooperation and Development (OECD) to review the impact of possible tax changes on investment funds.
Earlier this month the OECD published a report on the development of its Base Erosion and Profit Shifting (Beps) plan, which is aimed at cracking down on tax evasion by multinational firms.
The IMA had expressed concern that the Beps plan could have an “inadvertent impact on the tax treatment of funds”.
“Our main concern is that funds should continue to be able to get the benefit of double tax treaties,” stated the IMA.
“[These] are bilateral tax treaties signed by governments that prevent double taxation of income (i.e. dividends) and afford preferential tax treatment to residents; broadly speaking they encourage cross-border investment.”
The UK has more than 130 such treaties and the IMA had been concerned that they would be targeted under the new scheme from the OECD.
However, in its initial report on the Beps scheme, the OECD said it would consult on how its rules will affect funds and whether they should be encompassed in the scope of the rules.
The IMA said: “We are pleased the OECD recognises our concerns around the impact in investment funds and that they will seek further clarification before final recommendations are published.”
