ICC Document & publication

ICC Comments on the OECD Discussion Draft on Hybrid Mismatch Arrangements (2014)

ICC submitted high level and fundamental comments to the OECD’s Discussion Drafts on Action 2 of the OECD’s Base Erosion and Profit Shifting (BEPS) Project.

ICC submitted high level and fundamental comments to the OECD’s Discussion Drafts on Action 2 of the OECD Base Erosion and Profit Shifting (BEPS) Action Plan.

BEPS refers to tax planning strategies that exploit gaps and mismatches in tax rules to make profits ‘disappear’ for tax purposes and/or to shift profits to locations where there is little or no real activity but the taxes are low resulting in little or no overall corporate tax being paid.

OECD’s BEPS Action 2 is intended to neutralize the effects of hybrid mismatch arrangements, develop model treaty provisions and recommendations regarding the design of domestic rules to neutralize the effect (e.g. double non-taxation, double deduction, long-term deferral) of hybrid instruments and entities.

The first OECD discussion draft, Neutralise the effects of Hybrid Mismatch Arrangements –Recommendations for Domestic Laws, sets out recommendations for domestic rules to neutralise the effect of hybrid mismatch arrangements and the second discussion draft, Neutralise the effects of Hybrid Mismatch Arrangements – Treaty Issues, discusses the impact of the OECD Model Convention on those rules and sets out recommendations for further changes to the Convention to clarify the treatment of hybrid entities.