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Hugh J. Ault and Brian J. Arnold(8), (9) and (10) Assure that transfer pricing outcomes are inline with value creation with respect to intangibles, risksand capital, and other high-risk transactions;(11) Establish methodologies to collect and analyse data onBEPS and the actions to address it;(12) Require taxpayers to disclose their aggressive tax planningarrangements;(13) Re-examine transfer pricing documentation;(14) Make dispute resolution mechanisms more effective;(15) Develop a multilateral instrument to enable interestedcountries to implement measures developed in the courseof the work on BEPS and amend bilateral tax treaties.The items listed in the OECD Action Plan on BEPS that aremost relevant to developing countries will be discussed in detail inthe following sections of this chapter. However, some preliminaryobservations can be made at this point. The substantive items in theOECD Action Plan on BEPS can be grouped into two basic categories.The first category includes transactions and arrangements where theinteraction of domestic tax rules of two or more countries create thepossibility of double non-taxation or taxation at a low rate. These situationsare described as resulting from the lack of “coherence” of existinginternational tax rules. The OECD Action Plan on BEPS observesthat much attention has been paid in the development of internationaltax standards to measures intended to avoid double taxation. However,the interaction of rules that allow income to escape tax altogether orto be taxed at a low rate have been for the most part ignored, whichhas generated a number of techniques that allow for base erosion andprofit shifting. These typically involve situations where a countryallows a deduction for a payment with the expectation that the paymentwill be taxed in another jurisdiction but where this is in factnot the case. A similar problem arises where countries treat an entitydifferently, one viewing it as transparent and taxing the participantsand the other viewing it as a taxable entity. Again, there is a lack ofcoherence between the two national tax systems.A separate set of issues can arise where there is a disconnectbetween the actual economic activities of a company and the4