preferential tax regimes

The assessments of preferential tax regimes are conducted by the Forum on Harmful Tax Practices (FHTP), comprising over 140 member jurisdictions of the Inclusive Framework. Since the start of the BEPS Project, the FHTP has reviewed a total of 322 preferential tax regimes. The latest assessment by the FHTP (during its October 2023 meeting) has yielded new conclusions on 4 regimes.

• Access the full technical summary of the outcomes of the FHTP reviews (as of February 2024)

SUBSTANTIAL ACTIVITIES IN NO OR ONLY NOMINAL TAX JURISDICTIONS

The FHTP standard on substantial activities in no or only nominal tax jurisdictions, published in November 2018, seeks to ensure that mobile business income cannot be parked in a no or only nominal tax jurisdiction without the core business functions having been undertaken by the same business entity, or in the same location.

In doing so, the Inclusive Framework will ensure that substantial activities must be performed in respect of the same types of mobile business activities, regardless of whether they take place in a preferential regime or in a no or only nominal tax jurisdiction.

• See the latest results of the FHTP’s review of the standard on substantial activities in no or only nominal tax jurisdictions (as of February 2024)

News

• 06/02/2024 - Inclusive Framework Members continue countering harmful tax practices
• 21/06/2023 - Continued progress on countering harmful tax practices as jurisdictions bring their preferential regimes in line with international standards
• 05/01/2023 - OECD releases results that show further progress in countering harmful tax practices
• 27/07/2022 - New results show progress continues in combatting harmful tax practices
• 24/01/2022 - Countries continue the successful implementation of international standards on harmful tax practices and tax dispute resolution
• 05/08/2021 - Progress towards a fair global tax system continues as countries bring their preferential tax regimes in line with international standards
• 23/11/2020 - OECD delivers on tackling harmful tax practices, as a further set of preferential tax regimes are dismantled or tightened
• 23/07/2019 - OECD releases latest results on preferential regimes and new results on no or only nominal tax jurisdictions
• 29/01/2019 - OECD announces progress made in addressing harmful tax practices
• 15/11/2018 - OECD releases latest results on preferential regimes and moves to strengthen the level playing field with zero tax jurisdictions
• 17/05/2018 - OECD releases decisions on 11 preferential regimes of BEPS Inclusive Framework Members
• 08/02/2018 - Updated conclusions on preferential tax regimes

FURTHER INFORMATION

The Action 5 minimum standard consists of two parts. One part relates to preferential tax regimes, where a peer review is undertaken to identify features of such regimes that can facilitate base erosion and profit shifting, and therefore have the potential to unfairly impact the tax base of other jurisdictions. The second part includes a commitment to transparency through the compulsory spontaneous exchange of relevant information on taxpayer-specific rulings which, in the absence of such information exchange, could give rise to BEPS concerns.

• Find out more about BEPS Action 5
• Contact us by e-mail: ctp.beps@oecd.org
• Follow us on social media: @OECDtax (Twitter) & OECD Tax (LinkedIn)