BEPS, ATAP and the new tax dialogue: a transatlantic competition?
The Tax Cuts and Jobs Act (TRA17) signed into law by President Trump on December 22, 2017 contains multiple provisions that incorporate the principles of the OECD/G20 BEPS into domestic US tax law. Together with the changes in the 2016 US Model Tax Treaty, these provisions mean that the US is following the EU in implementing BEPS and particularly its underlying principle, the single tax principle (all income should be subject to tax once at the rate derived from the benefits principle, i.e., active income at a minimum source tax rate and passive at the residence state rate). This represents a triumph for the G20/OECD and is incongruent with the generally held view that the US will never adopt BEPS.
Since the BEPS’s launch in 2013, the US has actively participated in all aspects of the project. However, until recently, the general view was that following the conclusion of the BEPS negotiations and the change of Administration, the US was stepping back from the BEPS process. While the EU was charging ahead with implementing BEPS through the Anti-Tax Avoidance Directive (ATAD), the US stated that it was already in compliance with all BEPS minimum standards and therefore other than country-by-country reporting (CbCR) it had no further BEPS obligations. The US decided not to sign the Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting (MLI), which would have obliged it to implement BEPS into tax treaties and did not join the CRS...
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