Economic substance and transparency - the new drivers in today’s tax environment - were now more than ever, aggressive tax structures are being scrutinized globally.

Clients are looking for knowledgeable and trusted partners to assist them in offering transversal solutions in a 360º service, updating old structures, and adapting to the new international reporting standards and the business needs.

Amicorp’s global presence and its’ compliant robust products and services make us well placed to assist large global corporates. In our endeavor to keep our clients BEPS compliant, we support the multinational structures via migrating to a well-reputed country. We look at optimizations in organization and operations, with a simplified and robust structure adapted to the new BEPS/transparency with substance and good practices.

Base Erosion Profit Shifting (BEPS)

BEPS refers to tax planning that exploit gaps, mismatches, and loopholes in tax rules and tax treaties, making profits “disappear” for tax purposes or to shift profits to location where there is little or no real activity but where the taxes are low, resulting in little or no overall corporate tax. In pre-BEPS era, these tax planning strategies were legitimate and hard to combat by jurisdictions.

In the past few years, more than 100 jurisdictions have adopted OECD’s BEPS project and have implemented the recommended BEPS measures, including Place of Effective Management (POEM) and General Anti-Abuse Rules (GAAR).

Fifteen BEPS Action Plans

In July 2013, upon request of the G20, and following a lengthy debate on BEPS tax planning strategies, the OECD published a document identifying 15 Actions to tackle the BEPS tax strategies. The 15 BEPS Action strategies focus on three principles:

  • Establishing coherence in international taxation;
  • Aligning taxing rights with substance; and
  • Improving transparency.

These principles are put in place to effectively prevent Double Non-Taxation, and cases of no or low taxation typically occur as a result of artificially segregating taxable income from the activities that generate it. In essence, the BEPS project attempts to align taxation with activity and added value, e.g., companies should be taxed in the country or countries in which the activities take place.

BEPS recommendations to modify domestic law and tax treaties

The BEPS project outcome is delivered in the form of BEPS recommendations for each of the 15 detailed Action Plans. In October 2015, the OECD released final reports on the 15 Action Plans which can be found on the OECD’s website:

The OECD/G20 Inclusive Framework on BEPS was established, including BRIC Countries and interest non-OECD/G20 countries, to create consensus and allow participation on an equal footing in the development of standards on BEPS related issues. Currently, with over 135 countries as members of the Inclusive Framework, all these countries are expected to implement the BEPS recommendations.

The BEPS recommendations require modifications to domestic tax laws of each country or their bilateral tax treaties. Also, a multilateral instrument (MLI) has been developed to swiftly implement the tax treaty-related BEPS measures consistently with respect to potentially more than 3,000 tax treaties currently in force. More than 90 countries have already signed and ratified the multilateral instrument.

Our BEPS services

Amicorp can assist with a BEPS/Substance health test and, with solutions to adapt the structure to the new international drivers of transparency and economic substance, which nowadays have become applicable to international structuring.

Our services include:

Assurance: Impact assessment report
  • BEPS/Substance health test: analysis of the corporate structure, business reasons, and substance identifying impact/risk of the latest changes in regulations and
  • providing recommendations on improvements of the existing structure or alternative structure solutions.
Improvements: Substance & Governance
Alternative structuring solutions
Continuous monitoring
Make a plan for a successful transition to the next generation

For more information on how to respond to the global BEPS project, and take advantage of Amicorp’s services, please contact your Amicorp Account Manager, Sales Manager or your nearest Amicorp office.

Our professionals

Eric Boes, Global Head – Regulatory Reporting and Tax Compliance Services
Carla Cerqueira, Specialist - Global Solutions Development