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Hugh J. Ault and Brian J. Arnoldand Profit Shifting” 2 (OECD Action Plan on BEPS) and, ultimately,the OECD Secretary-General Report to the G20 Leaders in November2014, 3 all of which are discussed below in more detail.1.2 History of the OECD work on BEPS1.2.1 OECD Report on Addressing BEPSInitially, the G20 requested the OECD to prepare a report setting fortha “diagnosis” of the extent and causes of profit shifting and the accompanyingbase erosion. The OECD Report on Addressing BEPS was presentedto the G20 Finance Ministers and Central Bank Governors attheir meeting in Moscow in February 2013, where it received a positivereception. 4The OECD Report on Addressing BEPS identified several “keypressure points” that were central in the spread of base erosion andprofit shifting:‣ ¾ International mismatches in entity and instrument characterization,so-called hybrid arrangements, which take advantage ofdifferences in domestic law to create income that escapes taxationaltogether or is taxed at an artificially low rate;‣ ¾ The use of treaty concepts limiting taxing jurisdiction to preventthe taxation of digital goods and services;‣ ¾ The use of debt financing and other intra-group financialstructures;‣ ¾ Various aspects of transfer pricing dealing with risk, intangibles,and the splitting of ownership within a group, which allow2OECD, Action Plan on Base Erosion and Profit Shifting (Paris: OECD,2013), available at http://www.oecd.org/ctp/BEPSActionPlan.pdf.3OECD, Secretary-General Report to G20 Leaders (Brisbane, Australia,November 2014) (Leaders’ Report), available at https://g20.org/wp-content/uploads/2014/12/OECD_secretary-generals_report_tax_matters.pdf.4Meeting of G20 Finance Ministers and Central Bank Governors, Moscow,February 2013, Communiqué, paragraph 20, available at https://g20.org/wp-content/uploads/2014/12/Final_Communique_of_FM_and_CBG_Meeting_Moscow.pdf.2