UK and International Tax news

OECD Issues Discussion Draft On The Interaction Between The Treaty Provisions Of BEPS Action 6 And The Treaty Entitlement Of Non CIV Funds

Sunday 22nd January 2017

OECD has invited comments on draft examples included in a discussion draft on the follow-up work on the interaction between the treaty provisions of the report on BEPS Action 6 and the treaty entitlement of non-CIV funds.

Paragraph 14 of the final version of BEPS Action 6 – Preventing the Granting of Treaty Benefits in Inappropriate Circumstances –  indicated that the OECD would continue to examine issues related to the treaty entitlement of non-CIV funds to ensure that the new treaty provisions included in Action 6 address adequately the treaty entitlement of these funds.

As part of the follow-up work on this issue, on 24 March 2016 the OECD published a consultation document on the treaty entitlement of non CIV funds which included a number of specific questions related to concerns, identified in the comments received on previous discussion drafts related to Action 6, as to how the new provisions included in that Report could affect the treaty entitlement of non-CIV funds as well as possible ways of addressing these concerns. Comments received in response to that consultation document were published by the OECD on 22 April 2016.

The latest discussion draft has been prepared to provide stakeholders with information on the subsequent developments in the work on the interaction between the treaty provisions of the report on Action 6 and the treaty entitlement of non-CIV funds, including the conclusions reached at the May 2016 meeting of Working Party 1 and the subsequent work on the development of examples related to the application of the principal purposes test (PPT) rule included in the Report on Action 6 with respect to some common transactions involving non-CIV funds.

Three examples covering (i) a regional investment platform, (ii) a securitisation company, and (iii) an immovable property non CIV fund have been included in the discussion draft for comments as to whether or not they could usefully clarify the application of the PPT rule to common transactions involving non CIV funds.

The discussion draft invites comments on the three examples by 3 February 2017

If you would like to further details on the above, please contact Keith Rushen on 0207 486 2378.

 

Contact Us