On 16 September 2014, the OECD released recommendation documents on the following first 7 elements of the BEPS Action Plan:
Action 1: addressing the challenges of the digital economy: creating rules to ensure the effective taxation of the creation of value taking into account the fact that the digital economy cannot be segregated from the rest of the economy, as it is integral part of it. Permanent establishment issues, importance of intangibles and use of data, as well as possible need to adapt CFC rules and transfer pricing rules will notably be considered;
Action 2: fighting hybrid mismatch arrangements: creating measures to ensure the coherence of corporate income taxation at the international level. According to statements by OECD, officials the new recommendations aim to create pre-determined rules for taxation in international situations on a multilateral basis rather than relying on unilateral measures;
Action 5: countering harmful tax practices: taking into account transparency and substance. The work has accelerated with significant progress on improving transparency on ruling and of consideration of intellectual property preferential regimes and methodologies to assess substantial activity in these regimes and others;
Action 6: to prevent the abuse of tax treaty: designing measures to prevent treaty abuse and treaty shopping, notably inclusion in all tax treaties of a general anti-abuse rule and/or of a limitation of benefits clause. It should be noted that BEPS should not worsen the situation of the investment funds;
Action 8: transfer pricing in the key area of intangibles: proposing solutions to ensure that transfer pricing outcomes are in line with value creation and through measures actions to address transfer pricing issues in the area of intangibles. However, the developments on this action are depending upon the developments of action 9 on risks and capital and of action 10 on other high-risk transactions;
Action 13: transfer pricing documentation: ensuring better transparency for tax administrations and enhanced consistency in the requirements imposed on taxpayers by determining specific transfer pricing documentation and with a template for country-by-country reporting, in addition to centralized and regional documentation;
Action 15: developing a multilateral instrument to amend bilateral tax treaties and domestic laws in accordance with the BEPS Action Plan.
OECD officials have further stated that the documents released remain drafts, as further discussions are required, particularly on implementation measures, and that final recommendations on these actions are to be issued in September 2015. However, they have indicated that a political consensus exists on the released recommendations.
In December 2015, the OECD will address the 8 remaining elements of the Action Plan, namely: improving the CFC rules (Action 3), limit base erosion via interest deductions and other financial payments (Action 4) , prevent the artificial avoidance of PE status (Action 7), risks and capital (Action 9), other high-risk transactions (Action 10), establish methodologies to collect and analyse data on BEPS and the actions to address it (Action 11), require taxpayers to disclose their aggressive tax planning arrangements (Action 12) and make dispute resolution mechanisms more effective (Action 14).