IBX-Jakarta. Quoting from www.oecd.org, members of the OECD/G20 Inclusive Framework on BEPS continue to make significant progress in the implementation of the BEPS package to tackle international tax avoidance, as the OECD releases the latest peer review results assessing the actions taken by jurisdictions to prevent tax treaty shopping and other forms of treaty abuse under Action 6 of the OECD/G20 BEPS Project.
The Fifth Peer Review Report on Treaty Shopping, which includes data on tax treaties concluded by the jurisdictions that were members of the OECD/G20 Inclusive Framework on BEPS on 31 May 2022, forms the basis of the assessment of the implementation of the BEPS Action 6 minimum standard.
The report (also available in French) reveals that members of the OECD/G20 Inclusive Framework on BEPS are respecting their commitment to implement the minimum standard on treaty shopping. It further confirms the importance of the BEPS Multilateral Instrument (MLI) as the tool used by the vast majority of jurisdictions that have started to implement the BEPS Action 6 minimum standard.
The MLI has continued to significantly expand the implementation of the minimum standard for the jurisdictions that have ratified it. The impact and coverage of the MLI are expected to continue to increase as jurisdictions complete their ratifications and as other jurisdictions with large tax treaty networks prepare to join it. To date, the MLI covers 100 jurisdictions and around 1 850 bilateral tax treaties.
As one of the four minimum standards, the BEPS Action 6 minimum standard identified treaty abuse, and in particular treaty shopping, as one of the principal sources of BEPS concerns. Treaty shopping typically involves the attempt by a person to access indirectly the benefits of a tax agreement between two jurisdictions without being a resident of one of those jurisdictions. To address this issue, all members of the OECD/G20 Inclusive Framework on BEPS have committed to implementing the BEPS Action 6 minimum standard and participate in annual peer reviews to monitor its accurate implementation.