Mr. Philip Kermode:

That is a question the Chair ought to put to the US. It is certainly heavily involved in it but, like any jurisdiction, it will have particular points of interest and others which might not be so important. The Chair’s point about the US having to make changes to deal with its problems with aggressive tax planning is a fair one. Everyone is aware of the issues of the so-called “check the box” and the problems driven in part by that. There is so much political capital tied up, particularly at G20 level, in this exercise that something will have to happen. The risk is that it is something that is too complicated. It is not about just trying to get the OECD countries on board but the other G20 countries and big players, such as the BRIC countries, Brazil, Russia, India and China, some of which have had little influence in designing international tax rules. It is far from a straightforward issue. For example, the discussions on the treaty abuse issues seem to be centring on the idea of having several measures together. The Americans have an interest in the limitation of benefits type clauses which restrict very much the benefits of a tax treaty. There are others who prefer a main purpose test. If this is an approach replicated throughout the BEPS project, there is a risk that one is adding to the protective measures without dealing with the problems at their base. That is why one of the critical issues would be dealing with transfer pricing because that will set the tone for much.