Structures such as the ‘double Irish’ will become ineffective when measures being developed in the course of the project to tackle base erosion and profit shifting have been implemented, an OECD tax expert predicted during a webcast on 23 January.
The OECD provided an update on ‘deliverables’ for 2014 and beyond. During a question and answer session, a journalist asked about ‘growing speculation that high tech companies with intellectual property in countries like Bermuda will end their “double Irish” structures as a result of the proposed transfer pricing changes that would reduce the profits that can be attributed to countries where there’s nothing other than legal ownership’.
Raffaele Russo, head of the BEPS project, said: ‘Yes, that is what’s going to happen. There are a number of measures that are being developed in the course of the BEPS project – including [measures] on the transfer pricing aspects of intangibles, treaty abuse, the use of dual-resident companies and [controlled foreign companies] – that effectively will put an end to stateless income or nowhere income. So all the structures that aim at achieving this effect will become ineffective once these measures are implemented.’
Pascal Saint-Amans, director of the OECD’s Centre for Tax Policy and Administration, stressed that it was up to governments to change the law. ‘What we say, and I think we want to insist on this, it is too easy to put the blame on businesses, on corporates – saying “you’re not doing the right thing”. The rules as they are facilitate double non-taxation. It’s legal. If governments are not happy with something which is legal, it is their responsibility to change the law.’
Structures such as the ‘double Irish’ will become ineffective when measures being developed in the course of the project to tackle base erosion and profit shifting have been implemented, an OECD tax expert predicted during a webcast on 23 January.
The OECD provided an update on ‘deliverables’ for 2014 and beyond. During a question and answer session, a journalist asked about ‘growing speculation that high tech companies with intellectual property in countries like Bermuda will end their “double Irish” structures as a result of the proposed transfer pricing changes that would reduce the profits that can be attributed to countries where there’s nothing other than legal ownership’.
Raffaele Russo, head of the BEPS project, said: ‘Yes, that is what’s going to happen. There are a number of measures that are being developed in the course of the BEPS project – including [measures] on the transfer pricing aspects of intangibles, treaty abuse, the use of dual-resident companies and [controlled foreign companies] – that effectively will put an end to stateless income or nowhere income. So all the structures that aim at achieving this effect will become ineffective once these measures are implemented.’
Pascal Saint-Amans, director of the OECD’s Centre for Tax Policy and Administration, stressed that it was up to governments to change the law. ‘What we say, and I think we want to insist on this, it is too easy to put the blame on businesses, on corporates – saying “you’re not doing the right thing”. The rules as they are facilitate double non-taxation. It’s legal. If governments are not happy with something which is legal, it is their responsibility to change the law.’
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