Friday, May 11, 2018
Caribbean territory Saint Lucia has joined the base erosion profit shifting (BEPS) Inclusive Framework and has therefore committed to the implementation of the BEPS Project minimum standards.
BEPS refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity. The BEPS package provides 15 Actions to equip governments with the domestic and international instruments needed to tackle BEPS, by ensuring that profits are taxed where economic activities generating the profits are performed and where value is created. The minimum standards cover four of these 15 Actions.
In implementing the minimum standards, territories agree to remove any "harmful" tax provisions in their domestic tax regimes, amend their tax treaty rules to prevent treaty abuse, implement country-by-country reporting rules and exchange these reports with other countries, and work together to improve cross-border tax dispute resolution mechanisms.
As well as agreeing to implement the minimum standards, members of the Inclusive Framework agree to work together on an equal footing to develop further BEPS measures, commit to participate in peer reviews on BEPS measures' consistent implementation, and pay an annual fee to the OECD. The Inclusive Framework is also supporting the development of the toolkits for low-capacity developing countries.
There are now 115 countries and jurisdictions party to the Framework.