OECD Targets “Profit Shifting”

Patrick Marley

Nov/Dec 2013

Sheldon Gordon, Lexpert Magazine


The Paris-based Organisation for Economic Co-operation and Development (OECD) is moving forward with its Action Plan on Base Erosion and Profit Shifting (BEPS), an initiative to modernize the global tax regime, with potential impacts upon Canadian multinationals.


“Parts of the action plan will likely move forward and have a significant impact on shaping domestic tax systems, says Patrick Marley, tax partner at Osler, Hoskin & Harcourt LLP in Toronto, “ but it’s unlikely that all 15 recommendations will be acted upon.”

Recommendations requiring universal adoption, such as a multilateral convention on amending the world’s 3,000 bilateral tax treaties, will likely be shelved, Marley says, unless their focus is narrowed.

Canada, he said, is ahead of the curve in regard to two other BEPS proposals: disclosure of “aggressive tax planning” (ATP) arrangements and prevention of tax treaty abuse.


The BEPS proposal for automatic sharing of companies’ tax data between tax authorities of different countries is a serious concern, warns Marley. In addition to extra paperwork, Canadian multinationals could experience embarrassing Snowden-style revelations if their tax filings flow to countries lacking adequate privacy safeguards.

The full article is available in the November/December 2013 issue of Lexpert Magazine; subscribers to the magazine can access the digital version here.