• Version
• Download 9
• File Size 205.04 KB
• File Count 1
• Create Date 5 June, 2015
• Last Updated 11 March, 2021

The OECD’s Approach to Tackling Treaty Shopping and Its Impact on Hong Kong

This article outlines the proposed changes to the tax treaty provisions recommended by the Organization for Economic Co-operation and Development (OECD) in their report of 16 September 2014 entitled “Preventing the granting of treaty benefits in inappropriate circumstances” (“the Report”). It focuses specifically on the Limitation of Benefits and Principal Purpose tests. Comments on the impact on Collective Investment Vehicles (CIVs) are also detailed in the context of the recommendations of the Report, as well as the follow-up work outlined in the OECD’s 21 November 2014 Discussion Draft. At the end of this article, we comment on how Hong Kong has reacted to the OECD’s anti-treaty shopping push as well as what these proposed changes may mean for Hong Kong in the future.