In 2013, OECD and G20 countries, working together on an equal footing, adopted a 15-point Action Plan to address BEPS. The standard requires that for certain highly mobile sectors of business activity, the core income generating activities must be conducted with qualified employees and operating expenditure in the jurisdiction. Two regimes have been found potentially harmful but not actually harmful (Aruba, Viet Nam) and one regime is not operational (Paraguay). January 28, 2019 Friday 25 th January 2018: On 24 th January, 2019, the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) of the OECD approved the Progress Report on its assessment of harmful tax practices of 57 preferential tax regimes, in 24 jurisdictions.. endobj
yet then place). Also, the “Inclusive Framework on BEPS” has approved the most recent results of reviews of jurisdictions' domestic laws conducted by the OECD Forum on Harmful Tax Practices (FHTP). Four regimes are in the process of being amended (Aruba, Greece, Kazakhstan). facilitate base erosion and profit shifting (BEPS) and therefore have the potential to unfairly impact the tax base of other jurisdictions. (v) The Insurance Act has been amended to remove tax exemption provisions applicable to non-domestic insurers. You will be sharing this exact view, based on your query, OECD/G20 Inclusive Framework on BEPS: Progress Report July 2018-May 2019. Deloitte Comments and Issues It also created the Forum on Harmful Tax Practices (FHTP). One regime has been found actually harmful (Jordan). endobj
For a “no or only nominal tax” jurisdiction, the challenge is that even though the formula could be applied (the result of which might be that there is zero eligible income), it is unclear how to apply the second part. The Standard further provides guidance on how the substantial activities requirements will apply to “no or only nominal tax” jurisdictions for more specific cases generating IP income, i.e., patents and similar assets, marketing intangibles and other exceptional cases. <>/ProcSet[/PDF/Text/ImageB/ImageC/ImageI] >>/MediaBox[ 0 0 595.32 841.92] /Contents 4 0 R/StructParents 0>>
13 regimes were abolished (Cabo Verde, Malaysia, Mongolia, Montserrat, Morocco, Switzerland, Thailand). Organisation for Economic Co-operation and Development, OECD Action Plan on Base Erosion and Profit Shifting 2013, OECD announces progress made in addressing harmful tax practices (BEPS Action 5), https://wiki.treasurers.org/w/index.php?title=Forum_on_Harmful_Tax_Practices&oldid=38297. It is our shared hope that countries will agree that this Friday 25th January 2018: On 24th January, 2019, the Inclusive Framework on Base Erosion and Profit Shifting (BEPS) of the OECD approved the Progress Report on its assessment of harmful tax practices of 57 preferential tax regimes, in 24 jurisdictions. Where the business activities are the exploitation of IP assets, the substance requirements used by the FHTP are the “nexus approach” which consists of two parts: (i) a first part which sets out a formula to determine the amount of eligible income which can benefit from a lower tax rate; and (ii) a second part which is a consequence for the non-eligible income which is then taxed at the normal (i.e., higher) tax rate. The FHTP has now reviewed the new domestic laws of the 12 no or only nominal tax jurisdictions. (iii) The Companies (Special Licences) Act has been amended to remove the 1.5% business tax concession and withholding tax exemptions applicable to CSLs. Press Releases Seychelles Preferential Tax Regimes – NOT HARMFUL. In addition to the nexus approach, Ministry of Finance, Trade Investment and Economic Planning. x���|9i�a��;Np _&N8qb���
5b�˘�f������k�է��~�IxB�A�}Z?&� �^����4�����{�,���ϟ}^�]^���?�Wr�~)���ߖ�����}z���5�D��S?������d$|�X���+@������,��o��'��}\⇫h�r��7������ӧ�%��b��{Ի~���zD���HQ�h Since the start of the BEPS project, the Forum on Harmful Tax Practices (“FHTP”) has reviewed a significant number of preferential regimes. The licensees are also expected to incur an adequate amount of operating expenditures for such activities. The review covered not only preferential tax regimes, but the results of the review of the substantial activities factor for no only nominal jurisdictions. The legislative amendments are as follows: (i) The Business Tax Act has been amended to move Seychelles tax system to a territorial system. As agreed as part of the BEPS Action 5 minimum standard, peer reviews are undertaken to identify features of IP regimes that can (ii) The International Business Companies Act has been amended to allow IBCs to carry on business in Seychelles. Only IBCs deriving "Assessable Income" in Seychelles will be required to submit Annual Returns and Audited Accounts (in line with the Companies Ordinance 1972) to the FSA. The Forum on Harmful Tax Practices is the body established by the Organisation for Economic Co-operation and Development (OECD) to review the compliance of tax jurisdictions with its guidelines on transparency and other aspects of tax structuring. For activities within scope that earn non-IP income, this would mean that the “no or only nominal” tax jurisdiction would be required to meet the same substantial activities criterion applicable for IP-regimes, meaning that it would need to introduce laws to: (i) define the core income generating activities for each relevant business sector; (ii) ensure that core income generating activities relevant to the type of activity are undertaken by the entity (or are undertaken in the jurisdiction); (iii) require the entity to have an adequate number of fulltime employees with necessary qualifications and incurring an adequate amount of operating expenditures to undertake such activities; and (iv) have a transparent mechanism to ensure compliance and provide an effective enforcement mechanism if these core income generating activities are not undertaken by the entity or do not occur within the jurisdiction. to a wide range of activities and do not necessarily exclude income from IP. The Ministry of Finance, Trade, Investment and Economic Planning, Financial Services Authority and Seychelles Revenue Commission would like to thank all stakeholders who have contribute to the finalization of the regimes and will continue to work closely with them during the 2019 for the other actions.