The OECD Forum on Harmful Tax Practices (FHTP) will begin to move towards the “effective implementation” of its economic substance rules in January 2021.
The 12 jurisdictions affected – known as no or only nominal tax jurisdictions - will face spontaneous exchanges of information on the activities and income of entities with the jurisdictions of the immediate parent, ultimate parent and beneficial owners of such entities.
At the same time, the FHTP will launch an annual monitoring process to ensure that the 12 jurisdictions have appropriate mechanisms in place to ensure ongoing compliance with the standard.
All 12 no or only nominal tax jurisdictions now have a legal framework for the collection and reporting of the required information on the activities and revenue of entities that is in line with the FHTP Standard, the OECD stated.
As a result, the focus has shifted to the effective implementation. The focus is therefore moving to the effective implementation of the FHTP Standard.
The FHTP introduced its economic substance criteria in 2018, requiring jurisdictions operating a 'no or o...