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Draft GFIA response to the OECD Discussion Draft on BEPS Action 4 Approaches to Address BEPS Involving Interest in the Banking and Insurance Sectors


Release Date: 09/08/2016
Staff Reference: Peggy McFarland

Summary

  • GFIA supports the OECD's broad objectives in combating aggressive tax planning through excessive leverage and inappropriate interest deductions. However, it is critical that any measures adopted by the OECD are workable, well targeted, and do not result in unintended consequences that negatively impact the efficiency of commercial insurance operations and the availability and cost of insurance coverage for consumers. In addition, as noted by the OECD in paragraph 6 of the Discussion Draft, any approaches adopted by the OECD "should not conflict with or reduce the effectiveness of regulatory capital rules intended to reduce the risk of a future financial crisis".
  • GFIA's recommendations below are consistent with promoting high capital levels to ensure the safety and soundness of financial institutions.