Neutralising the Effects of Hybrid Mismatch Arrangements
This report sets out recommendations for domestic rules to neutralise the effect of
hybrid mismatch arrangements and includes changes to the OECD Model Tax Convention
to address such arrangements. Once translated into domestic law, the recommendations
in Part 1 of the report will neutralise the effect of cross-border hybrid mismatch
arrangements that produce multiple deductions for a single expense or a deduction
in one jurisdiction with no corresponding taxation in the other jurisdiction. Part
1 of the report will be supplemented by a commentary, which will explain the recommended
rules and illustrate their application with practical examples. Part 2 of the report
sets out proposed changes to the Model Convention that will ensure the benefits of
tax treaties are only granted to hybrid entities (including dual resident entities)
in appropriate cases. Part 2 also considers the interaction between the OECD Model
Convention and the domestic law recommendations in Part 1.
Published on September 16, 2014Also available in: German, French, Korean, Chinese
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