The fundamental objective of the OECD’s action plan is to prevent BEPS strategies from artificially detaching profits from the activities which generate them. This will require new standards on tax coherence, better anti-abuse measures and smarter transparency. Recommendations for reform will cover: the digital economy; hybrid arrangements; CFC regimes; harmful tax practices; transfer pricing; treaty abuse; and PE status. The OECD will have to tread a delicate path between maximising tax harmonisation, to enhance the effectiveness of the new standards, and not alienating governments jealous of their fiscal sovereignty.
