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Peter A. HarrisThis lack of focus on tax burden means that the relationshipbetween Action 2 and the general use of low-tax jurisdictions isunclear, or at least is not specifically addressed in the OECD Action2 — 2014 Deliverable and the OECD Public Discussion Draft on BEPSAction 2 — Domestic Issues. As noted above, the effect of a hybridmismatch arrangement can be similar to using an intermediary in athird country (triangular arrangement). For many decades, tax plannershave used companies in third countries to change the allocation,timing, quantity and character of payments ultimately passing fromthe jurisdiction of the investment to the jurisdiction of the investor.The novelty of hybrid mismatch arrangements is that they can do thiswithout the use of a third country (even though they often do involvethird countries). 29 Because intermediaries and hybrid mismatcharrangements are being used in the same manner, it may be suggestedthat rules designed to regulate them should be developed together toensure a consistent treatment (see section 4.4 below).The OECD Action 2 — 2014 Deliverable does not “address differencesin the timing of payments,” although it is not exactly clearwhat this means. 30 The OECD Public Discussion Draft on BEPSAction 2 — Domestic Issues makes clear that a timing difference of thetype identified in example 5 would not be covered. 31 Notably, however,while a timing mismatch under an “original issue discount” is not covered,one example provided in the OECD Public Discussion Draft onbe something that another country can neutralize or not? Are the OECDproposals intended to apply only where there is a mismatch in the characterof the financial instrument or entity? If the latter approach is adopted, itwould drive a large hole through the impact of the OECD proposals. OECDAction 2 — 2014 Deliverable, paragraph 48, instils little confidence by suggestingthat such a fundamental matter should be dealt with “separately or inthe context of Action Item 4 on Interest Deductibility.”29Peter A. Harris and David Oliver, International Commercial Tax(Cambridge: Cambridge University Press, 2010), 369-70.30For example, see OECD Action 2 — 2014 Deliverable, supra note2, paragraph 50 and page 72, and OECD Public Discussion Draft on BEPSAction 2 — Domestic Issues, supra note 2, paragraph 26.31OECD Public Discussion Draft on BEPS Action 2 — Domestic Issues,supra note 2, paragraph 88.214