On February 19, 2015, TEI submitted comments to the OECD’s Forum on Harmful Tax Practices regarding the modified nexus approach to preferential intellectual property tax regimes under BEPS Action 5. The Institute’s letter focused on the fact that the modified nexus approach would require many multi-national enterprises to substantially reorganize their operations to take advantage of preferential tax regimes specifically enacted to attract business and that such reorganizations are costly and may not be undertaken. TEI also recommended that the modified nexus approach not limit the relevant IP assets to patents and the relevant qualifying activities to research and development, among other things.
TEI’s comments were prepared under the aegis of TEI’s European Direct Tax Committee, whose chair is Nick Hasenoehrl. Benjamin R. Shreck, TEI Tax Counsel, coordinated the preparation of TEI’s comments.