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Business conference with OECD on BEPS: Will Morris of BIAC reacts

The OECD met with BIAC (Business and Industry Advisory Committee) last Tuesday in Paris to discuss industry’s concerns over the base erosion and profit shifting (BEPS) project. Will Morris, chairman of BIAC’s tax and fiscal policy committee, tells ITR how the meeting went and what can be expected to happen next from an industry perspective.

Morris said not as many government representatives attended as originally planned because the meeting of the Committee of Fiscal Affairs, scheduled for the day before, was cancelled. However more than 90 business people were in attendance and government representatives from 10 governments, including Australia, France, Germany, Mexico, Spain and the UK.

“We had a good set of exchanges. We were determined that the OECD be very clear that business is very serious about working constructively to engage in the BEPS project, and also that we understand the political mandate from the G20 leaders that are driving the project.”

Morris said business will seek to explain how different industries do business to help the OECD understand that some things that look odd are actually just how modern, globalised business works. In other cases tax does play a part and the OECD members will have to consider whether tax competition (thought incentives) or other factors justify that.

“A lot of people came forward with descriptions of business models. I got the feeling that the impression created was the same for both Mike Williams (director of business and international tax at HM Treasury) and Pascal Saint-Amans (director of the OECD’s centre for tax policy and administration); they were pleased and want to carry on engaging with business.”

Action 14, relating to dispute resolution, in the BEPS action plan came up during the meeting, which Morris was not top of the list for all governments around the table. “But it is critical that we deal with this issue,” he said, adding that he also spoke about the dangers of unilateral action during the meeting, a concern that was shared by Saint-Amans at International Tax Review’s recent Global Transfer Pricing Forum in New York. “We want a new set of international rules that everyone agrees with,” said Morris.

Digital

The BEPS project has a strong focus on the digital industries and Morris said some of the discussion about these industries from Tuesday’s meeting will help inform the new working parties.

“Many bricks and mortar companies actually do a lot of work digitally; it’s often traditional companies doing things in new ways. We need to ask whether the technological changes have really changed business models and value chains, or are they simply new ways of facilitating the traditional business?”

Timing

The project will follow a traditional pattern of the OECD working groups: policy; drafting and implementation and execution, but the project must move much faster than typical work done by the organisation.

“I do have concerns about the timetable. In response, I have made it very clear that BIAC is happy to be called upon at any point in relation to any topic and we will work to the OECD’s timetable,” Morris said.

Some major decisions will have to be made in the next four months, Morris said. Given the compressed nature of the timetable, some of the key policy decisions will have to be made by Christmas in order to have fully formed proposals by next September. “We are not seeking a BIAC position on this – BEPS is too broad – but my aim is to funnel in as broad a range of business comment as possible.”

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