Latest Government Jobs and updates

Thursday

Union Cabinet approves signing of the Multilateral Convention to Prevent Base Erosion and Profit Shifting

TNPSC Current Affairs May 17, 2017

Union Cabinet approves signing of the Multilateral Convention to Prevent Base Erosion and Profit Shifting

Union Cabinet has given its nod signing of the Multilateral Convention to implement tax treaty to Prevent Base Erosion and Profit Shifting (BEPS) by India.

The Multilateral Convention will check the loopholes in existing laws under which organisation shows artificial shifting profits to low or no-tax countries where there is little or no economic activity.

About Multilateral convention and its Challenges: 
  • The Multilateral convention is an outcome of the OECD / G20 BEPS Project to tackle base erosion and profit shifting through tax planning strategies.
  • BEPS project has identified 15 actions to address BEPS in a comprehensive manner.
  • Implementing BEPS Package requires changes to more than 3000 bilateral tax treaties , which is burden and time consuming.
  • The Multilateral convention considered as a Multilateral instrument to modify all bilateral tax treaties to implement BEPS .
  • The Convention implements two minimum standards relating to prevention of treaty abuse and dispute resolution through Mutual Agreement Procedure.
  • Signing of the Multilateral Convention will enable the application of BEPS outcomes through modification of existing tax treaties in a swift manner
  • And it will enable curbing of revenue loss through treaty abuse and base erosion and profit shifting strategies by ensuring that profits are taxed where  economic activities generating the profits are carried out and where value is created.


No comments:

Post a comment