Jan 102016
Action Plan 6 of the Organisation for Economic Co-operation and Development (OECD) Base Erosion and Profit Shifting (BEPS) final reports identifies treaty abuse, particularly treaty shopping, as one of the most significant causes of BEPS. It recognizes that existing domestic and international tax rules, including double taxation treaties, should be modified to include sufficient safeguards against practices that take advantage of the differences in domestic tax systems of countries and the gaps in the implementation of tax treaties. Countries have therefore agreed to include anti-abuse provisions in their tax treaties, including a minimum standard to counter treaty shopping.