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Ireland's capital allowances for intangibles scheme was the BEPS structure to secure it as an ultra-low tax (i.e. 0-3% in perpuity) location for U.S. multinationals, that is in full compliance with all OECD guidelines, and the OECD BEPS project. [63] However, the U.S. and EU's new tax regimes deliberately "override" these IP-based BEPS tools.
The Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, sometime abbreviated BEPS multilateral instrument, is a multilateral convention of the Organisation for Economic Co-operation and Development to combat tax avoidance by multinational enterprises (MNEs) through prevention of Base Erosion and Profit Shifting (BEPS).
In December 2016, Cobham highlighted one of the key anti-BEPS Actions, full public country-by-country reporting ("CbCr"), had been dropped due to lobbying by the U.S. multinationals. [69] Country-by-country reporting is the only way to observe the level of BEPS activity and OECD compliance in any country conclusively.
In response to this new OECD initiative, the EU, and the French in particular, dropped their "Digital Tax" proposal in favour of allowing the OECD BEPS 2.0 initiative reach a conclusion, which it is scheduled to do by 2020. In 2021 the G20 and OECD produced a report suggesting a change in how multinational enterprises (MNE) are taxed.
The Organisation for Economic Co-operation and Development (OECD; French: Organisation de coopération et de développement économiques, OCDE) is an intergovernmental organization with 38 member countries, [1] [4] founded in 1961 to stimulate economic progress and world trade.
In October 2015, the OECD released the final reports on the Base Erosion and Profit Shifting (BEPS) project. Action 7 was targeted at Preventing the Artificial Avoidance of Permanent Establishment Status and proposes a large number of changes that are set to be included in the next version of the OECD Model Tax Convention.
Apple used the CAIA (or Green Jersey) BEPS tool in Q1 2015, resulting in the "leprechaun economics" restatement of Irish GDP by 34.4 percent. Ireland has other IP–based BEPS tools (Ireland as the first OECD nexus-compliant KDB), [71] and is a supporter of the OECD BEPS project (see box). [70]
In August 2016, the EU Commission levied the largest tax fine in history, at US$13 billion, against Apple in Ireland for abuse of the double Irish BEPS tool from 2004 to 2014. In January 2017, the OECD estimated that BEPS tools, mostly located in OFCs, were responsible for US$100 to 240 billion in annual tax avoidance. [28]