G20 countries will adopt new corporate tax accord

Significance

The rulings come as the EU advances legislation to increase transparency on corporate tax rulings and after the G20 on October 9 endorsed the new OECD Base Erosion and Profit Shifting (BEPS) framework for countering corporate tax avoidance.

Impacts

• These EU rulings suggest similar decisions are imminent involving Apple in Ireland and Amazon in Luxembourg.
• The rulings will inspire further challenges to similar arrangements; they are the major threat to similar policies.
• Most BEPS measures will require changes to bilateral tax treaties and could face national-level delays or rejections.
• Monitoring of BEPS implementation will commence, but compliance will be voluntary and thus limited.