Harmful Tax Practices – 2018 Peer Review Reports on the Exchange of Information on Tax Rulings
Inclusive Framework on BEPS: Action 5
BEPS Action 5 is one of the four BEPS minimum standards which all Inclusive Framework members have committed to implement. One part of the Action 5 minimum standard is the transparency framework for compulsory spontaneous exchange of information on certain tax rulings which, in the absence of transparency, could give rise to BEPS concerns. Over 135 jurisdictions have joined the Inclusive Framework and take part in the peer review to assess their compliance with the transparency framework.
Specific terms of reference and a methodology have been agreed for the peer reviews to assess a jurisdiction’s implementation of the minimum standard. The review of the transparency framework assesses jurisdictions against the terms of reference which focus on five key elements: i) information gathering process, ii) exchange of information, iii) confidentiality of the information received; iv) statistics on the exchanges on rulings; and v) transparency on certain aspects of intellectual property regimes. Recommendations are issued where improvements are needed to meet the minimum standard.
This report reflects the outcome of the annual peer review of the implementation of the Action 5 minimum standard and covers 112 jurisdictions. It assesses implementation for the 1 January - 31 December 2018 period.
The review of the BEPS Action 5 standard on the exchange of information on certain tax rulings
The Action 5 Report (OECD, 2015) is one of the four BEPS minimum standards. It involves two distinct aspects: a review of certain preferential tax regimes and substantial activities in no or only nominal tax jurisdictions to ensure they are not harmful, and the transparency framework. Each of the four BEPS minimum standards is subject to peer review in order to ensure timely and accurate implementation and thus safeguard the level playing field. All members of the Inclusive Framework on BEPS commit to implementing the Action 5 minimum standard and to participating in the peer review, on an equal footing. The peer review of the Action 5 minimum standard is undertaken by the FHTP and approved by the Inclusive Framework on BEPS.