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Peter A. Harrisrule not be required to “establish that it has ‘lost’ tax revenue.” 83 TheOECD Action 2 — 2014 Deliverable made some adjustments to theOECD Public Discussion Draft on BEPS Action 2 — Domestic Issuessuch that there is now greater consistency based on D/NI or DD typesof mismatches. Generally, D/NI outcomes result in a denial of deductionin the State of the payer. The DD outcome results in the denial ofa deduction in the investor State.The exceptions to the responses (scope) have the potential to add asubstantial layer of complexity to the design and implementation of therecommendations. It is not the purpose of the present chapter to considerthese exceptions in detail. While they overlap substantially, theyare not consistent and their scope therefore depends on the rule in questionand which State is applying it. The drivers for these exceptions seemto be the potential for capturing “arrangements outside the intendedpolicy” and ability to administer the rules. 84 As in many instances, theintended policy is unclear; it is difficult to assess when a rule is worthadministering more broadly or narrowly and when it is not.3.2 Actions by payer/source/host State3.2.1 D/NI mismatchesIn the context of D/NI types of mismatch for both hybrid financialinstruments and transfers and hybrid entity payments, the OECD recommendsthat the State of the payer is the primary State. Accordingly,this State will deny the payer a deduction for the payment made thatis not included in the income of the recipient. In the context of hybridfinancial instruments and transfers, this is subject to the general recommendationthat the State of the recipient unilaterally deny a dividendexclusion or exemption for any amount that is deductible in theally, Peter A. Harris and David Oliver, International Commercial Tax” supranote 29, 103-5.83For example, OECD Public Discussion Draft on BEPS Action 2 — DomesticIssues, supra note 2, paragraph 27 (a), and OECD Action 2 — 2014 Deliverable,supra note 2, paragraph 36.84OECD Public Discussion Draft on BEPS Action 2 — Domestic Issues,supra note 2, paragraph 117.232