The OECD, in promulgating the discussion draft for action 12 of the base erosion and profit shifting project, sought to have tax authorities mandate disclosure initiatives that target the aggressive tax planning community. The drafters’ goal is to ‘‘rein-in’’ unwarranted activities by enabling tax administrations to challenge both domestic and international aggressive tax schemes. The draft itself, however, has significant limitations:
In addition, the draft fails to specify the scope of the aggressive tax shelter community itself. At various times, and depending on the specific context, the draft could apply such participant rules to promoters, advisers, material advisers, intermediaries, taxpayers, users, end-users, and others who provide ‘‘material assistance’’ to such schemes. The drafters acknowledge that those terms will need to be defined. It is unlikely that the action 12 drafters can weld these definitions into country-specific legislation.
Read more at: Tax Times blog