Press briefing of Cabinet Decision taken on 2018-01-02

Payment of Partner Fees for the Base Erosion and Profit Shifting (BEPS) Project

- It has become apparent that the multi-national companies involved in International Transactions are creating opportunities due to the loop holes in the domestic and international tax systems either to mitigate the potential tax exposure or to achieve no tax liability. As such, the Organization for Economic Cooperation and Development (OECD) and G-20 countries have prepared an action plan named 'Base Erosion and Profit Shifting (BEPS) Project' in order to address this issue.

Sri Lanka obtained its full membership in the year 2016 and at present, 107 countries have joined the framework. It is beneficial for Sri Lanka to maintain its membership since this framework project provides clear solutions to the states and tax administrators in carrying out the operations pertaining to tax evasions. Accordingly, the proposal made by Hon. Mangala Samaraweera, the Minister of Finance and Mass Media, to pay a membership fee of Euro 30,000 to the OECD to retain membership in the project, was approved by the Cabinet.