May 21, 2015 | Manal Corwin—national leader of KPMG LLP's International Tax practice and principal in charge of International Tax Policy for the firm's Washington National Tax practice—discusses key BEPS-related takeaways and insights following her attendance at the 2015 G20 meeting held May 6-8 in Turkey. Visit KPMG's Base Erosion and Profit Shifting (BEPS): Tax Transparency site for more insights.
Manal Corwin: So Turkey has the Presidency of the G20 and, in that role, they hosted an international tax symposium in Istanbul that brought together government officials who are participating in the G20 BEPS initiative along with OECD member countries and OECD officials to talk about the current state of the project, as well as the progress that's been made to date.
The key takeaways coming out of the G20 conference is there is incredible political support behind the efforts that the G20 is making with respect to the BEPS initiative, as well as the OECD's efforts in that direction. I think that it's absolutely clear that this is going to produce action, a consensus that is going to be adopted by a number of jurisdictions. I think it's also absolutely clear that the political pressure for action is so significant that some countries are going to act even before the project is finished.
Notwithstanding that sentiment, there was a lot of talk about the importance of predictability and consensus, but I think the concern is that locally politics are playing a significant role in what's coming out of the efforts.
Other key takeaways is that it's clear that there are certain action items that are going to produce consensus and other action items that are only going to result in best practices. So notably, hybrids, transfer pricing reporting, consensus around permanent establishments—all of those are likely to produce consensus results. Other areas— CFCs, interest deductibility—are likely to generate best practices.
I think what's become clear coming out of the symposium and other developments around the globe is that multinationals absolutely need to start addressing BEPS issues today, in particular with respect to the obligation to report on their country-by-country activities. There are a number of countries that have already adopted it. At the symposium, other countries echoed the importance of this action item and the intent to adopt it.
So it's coming. It's coming in 2017 and business needs to prepare not only for the compliance aspects and the mechanical aspects of being able to meet the obligation to report on their country-by-country information, but they need to think strategically about the story it tells about their company and keep in mind the fact that it may very well become a publicly disclosed document, even though the intent right now is that it stays confidential.
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