Legislative response to BEPS and the impact on cross-border M&A

Excerpt from EY’s 14th Capital Confidence Barometer.

Since the release of the OECD’s final Base Erosion Profit Shifting (BEPS) guidance in October 2015, local country adoption and legislation have started to emerge globally.

The 14th edition of EY’s Global Capital Confidence Barometer survey finds a range of attitudes toward the changes in tax regulations, with over a third yet to consider the implications. There has been a direct impact on current dealmaking, with more than a quarter stating that they have altered or cancelled planned transactions in response to the guidance.

BEPS LAW

For those who have not yet considered the implications of BEPS, this may be due to the level of uncertainty given that many jurisdictions have not yet adopted BEPS guidance into local law; however, this is beginning to shift as countries implement changes into local legislation.

As additional countries adopt the various BEPS Action Points and there is more clarity on local implementation, these changes will have a more tangible impact on transactions.

Companies will need to carefully consider their current corporate structure as well as their future investment destinations within this new and complex environment.

Read the full Global report here.