handbook-tb

Eric M. Zolt‣ ¾ “Broad approach”, whereby the OECD adopts a more holisticapproach to examine difficult issues and propose innovativesolutions; and‣ ¾ “Fundamental change approach”, whereby several of the existingfundamental principles and policies that shape the internationaltax regime would be open for re-examination. 45For example, if the OECD recommends a series of narrowly targetedrecommendations to curb some of the most notorious schemes bymultinational taxpayers, it is unlikely this will result in major changesin the cross-border tax regime. In contrast, if the OECD project onBEPS recommends reforms that significantly change the allocation ofprofits between source and residence countries, then the project willhave substantially more impact.In the OECD Action Plan on BEPS, there are 15 action items. Itis unlikely that the OECD would adopt a uniform approach in addressingthe various items. For example, the OECD could adopt a “narrowapproach” in addressing concerns about hybrid mismatch arrangementand adopt (although unlikely) a “fundamental change approach”to address the challenges of the digital economy. Once the OECDcompletes its work on this project, the question then becomes howcountries will respond to the proposed recommendations. Withoutsome type of coordinated effort among major countries, the chancesfor meaningful changes will be relatively small.Even apart from the OECD project on BEPS, the notorietyaround the aggressive tax planning by multinational entities has influencedthe timing and scope of domestic efforts to reform tax regimescovering cross-border transactions. Many countries, including Ireland,the United Kingdom of Great Britain and Northern Ireland and theUnited States, have adopted or are considering reforms in the “shadow”of the OECD project on BEPS.45Yariv Brauner, “What the BEPS?” (2014) Vol. 16, Florida Tax Review, 55.490