BEPS Hybrid Entities Proposal: A Slippery Slope, Especially for Developing Countries

Abstract

Two principle purposes of the OECD/G20 BEPS project can be identified: First, to combat against aggressive tax planning which results in less than single taxation, and secondly, to allocate taxing rights to the state in which the economic activity gives rise to income. This note demonstrates that Article 1(2) tends to enable diametrically opposite results.

Keywords: BEPS, Partnerships, Hybrid Entities, OECD, G20, United Nations, Model Tax Convention, Multilateral Instrument