Summary: 1. BEPS: discussion draft on Action 6 (prevent treaty abuse) • Released on 14 March 2014 • Proposed amendments to OECD model treaty • Limitation-on-benefits (LOB) provision • "Purpose" provision • PEs in third countries • "Saving clause" • Articles 10, 13, and 4(3) • To obtain a copy, visit www.deloitte.com/ap/dbriefs/bepscentral 2. BEPS: discussion drafts on Action 2 (hybrid mismatch arrangements) • Two discussion drafts (domestic law changes and treaty issues) released on 19 March 2014 • Domestic law recommended changes regarding i. Hybrid financial instruments and transfers ii. Hybrid entity payments iii. Imported mismatches and reverse hybrids • Double deduction (DD) structures and deduction / no income (D/NI) structures • Primary response, defensive rule, and scope • Proposed amendment to OECD model treaty: comprehensive hybrid income and entity provision • To obtain a copy of the two discussion drafts, visit www.deloitte.com/ap/dbriefs/bepscentral 3. China • VAT pilot program: proposed extension to more industries • Considering resource tax • For information: Vicky Wang (Shanghai): vicwang@deloitte.com.cn Ye Hong (Shanghai): hoye@deloitte.com.cn 4. Hong Kong • Advance ruling published by tax authorities • Obtaining financing in Hong Kong caused profits to be sourced in Hong Kong: surprising conclusion • To obtain a copy of our Tax Analysis on this ruling, visit www.deloitte.com/ap/dbriefs/bytes • For information: Davy Yun (Hong Kong): dyun@deloitte.com.hk 5. Treaties • Recently entered into force: India / Romania and Korea / Peru
