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Base Erosion and Profit Shifting
Collective Investment Vehicles
As outlined elsewhere, the OECD Base Erosion and Profit Shifting (BEPS) proposals were published on 16th September 2014. One of the crucial part for the real estate industry is Action 6, to "realign taxation and relevant substance to restore the intended benefits of international standards and to prevent the abuse of tax treaties".
One of the key open points in Action 6 is the treatment of Collective Investment Vehicles. (CIVs). The paper published on 16th September promised further consultation on this. The first consultation paper was published on 25th November 2014 and can be found here:
There are two fundamental issues from this for the real estate investment management industry:
a). The definition of a CIV;
b). The treatment of non-CIV funds.
Initially, the definition of a CIV relied on an earlier paper from 2010, The Granting of Treaty Benefits with Respect to the Income of Collective Investment Vehicles. This can be found here.
A further consultation was issued in March 2013. You can find our comments on this here.
A further "Discussion Draft on non-CIV examples" was issued on 6th January 2017 with comments to be received by 3rd February 2017. The OECD immediately the responses received. you can find the examples here and the responses here.