Base erosion and profit shifting (BEPS) regulations are becoming more onerous as part of an OECD initiative. What advice do you provide around this to your clients with operations in multiple jurisdictions?

Luxembourg recently introduced into domestic tax law the basic transfer pricing principles foreseen by Articles 8 -10 of the OECD BEPS report.

Luxembourg will have to implement the anti-tax avoidance directive which includes the principles set out by the OECD BEPS report as regards hybrid mismatch (Action 2), CFC Rules (Action 3), Limitation of Interest Deductions (Action 4) and the GAAR (Action 6).

On 24 November 2016, 100 jurisdictions agreed upon a multilateral instrument (MLI) which is aimed at the swift implementation of the tax provisions contained in the OECD BEPS report (Action 2 on hybrid mismatch, Action 6 on treaty abuse, Action 7 on avoidance of permanent establishment status and Action 14 on dispute resolution). The MLI will directly amend more than 2,000 bilateral tax treaties currently in force between the contracting states.

Finally, the country-by-country reporting was implemented in Luxembourg domestic tax law with the publication of the law dated 27 December 2016. Luxembourg entities falling within the scope of the country-by-country reporting will have to communicate economic, tax and financial information to the Luxembourg direct tax authorities (to be further exchanged with the foreign tax authorities).

Our main concern is to ensure that our clients are fully aware of what will be declared/exchanged.