Washington DC – Last week, in a letter to Treasury Secretary Jacob Lew, leaders of the National Foreign Trade Council (NFTC), Software Finance & Tax Executives Council (SoFTEC) and United States Council for International Business (USCIB) highlighted their concerns with the direction of the OECD/G-20 base erosion and profit shifting (BEPS) project.
In the letter, the group wrote:
“U.S. business has been constructively engaged in the BEPS project submitting comments, participating in public consultations, consulting with the US Treasury, the Congress, other governments, and the OECD. This effort has been directed at ensuring that the BEPS outcomes are appropriately targeted to genuine BEPS concerns and such outcomes are administrable by business and governments. At this stage we are concerned that the emerging outcomes are not sufficiently targeted, and will result in increased double taxation, complexity, costs and reduced cross-border trade and investment. In order to improve the outcome, we believe it is important that the U.S. Treasury continue to advocate strongly for clear, detailed agreement on international tax rules that are consistent with the initial goal of the BEPS project; that is, to ‘provide countries with domestic and international instruments that will better align rights to tax with economic activity.”
“… Currently, the proposed changes to the international tax standards are lacking in clarity and will permit countries to define their taxing jurisdiction as they wish without regard to the functions, assets and risks that take place in that country. Such an approach will allow tax auditors a great deal of flexibility in defining whether a taxpayer is subject to tax within a particular jurisdiction and if so how much income is subject to tax.
“Throughout the BEPS process, US business has been pressing for clarity. The lack of clarity and threat of double taxation will create uncertainty which will have a negative impact on global trade and investment.”
Read the full letter here.
About the NFTC
The National Foreign Trade Council (www.nftc.org) is a leading business organization advocating an open, rules- based global trading system. Founded in 1914 by a broad-based group of American companies, the NFTC now serves hundreds of member companies through its offices in Washington and New York.
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