ICC Document & publication

ICC comments on OECD Discussion Draft on the design and operation of the group ratio rule under BEPS Action 4

In the context of the OECD Base Erosion and Profit Shifting (BEPS) Project mandated by the G20, ICC submitted high level and fundamental comments on the OECD’s Discussion Draft on Action 4 (interest deductions): Elements of the Design and Operation of the Group Ratio Rule.

ICC submitted high level and fundamental comments to OECD’s Discussion Draft on Action 4 (interest deductions): Elements of the Design and Operation of the Group Ratio Rule; OECD Base Erosion and Profit Shifting (BEPS) Action Plan.

In October 2015, the BEPS Action 4 Report Limiting Base Erosion Involving Interest Deductions and Other Financial Payments set out a common approach to address BEPS involving interest and payments economically equivalent to interest.

The Discussion Draft does not change any of the conclusions agreed in the Report, but provides an additional layer of technical detail to assist countries in implementing the group ratio rule in line with the common approach. It examines alternative approaches to key aspects of the rule and emphasizes the importance of a consistent approach in providing protection for countries and reducing compliance costs for groups, while including some flexibility for a country to take into account particular features of its tax law and policy.