The Beneficial Owner Concept in the Context of Beps: Problems and Prospects

Abstract

The article analyzes the evolution of the beneficial owner concept in the context of the implementation of the Action Plan on Base Erosion and Profit Shifting. The main problem is the lack of an officially fixed definition of the term beneficial owner in international legal documents. The lack of unification in the definition of the concept of beneficial ownership, the ongoing discussions on its application, the growth of tax disputes, as well as the incompleteness of the reform in terms of the regulation of the concept in the OECD MC and its Commentary lend urgency and relevance to scientific research of the latter both in domestic and in world science of tax law. Although the terms beneficial owner, beneficial ownership, and so forth in the BEPS Plan may not be used directly, they are nevertheless of great practical value, especially in the light of the implementation of Actions 6 and 15 of the Plan. The article concludes that the concept is potentially compatible with other anti-abuse strategies (the limitation on benefits rule and the principal purpose test, in particular). The main issue that is explored in disputes about the norms of international agreements application is the assessment of the business purpose and proper qualification of the substance of the transactions (deals) made. In general, the beneficial owner concept not only has not lost its role in the fight against treaty shopping, but has taken up an official position among the instruments to combat BEPS.