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- We have explained the structure of our industry (the specific features of investment funds and the asset management industry) and asked for a explicit exclusion from the scope of the OECD Secretariat’s Proposal for a “Unified Approach”.
- The fund and asset management industry is a highly regulated industry operating under significant and specific legal, regulatory, transfer pricing and tax frameworks.
- The industry is not highly digitalised, is not heavily reliant on intangible assets or data and user participation is not fundamental to business models.
- The application of a new nexus and new profit allocation rules would be totally inappropriate to the way the industry operates.
- We have explained why investment vehicles should explicitly be carved out from the Global Anti-Base Erosion (GloBE) proposals and asked for an impact analysis of these proposals at an EU level.
- Investment funds are structured as tax neutral investment pooling vehicles as a matter of public policy.
- The role that investment funds have to play in providing investors with a diversified portfolio and global market access is crucial and not to be underestimated.
- The GloBE proposal should not risk all the achievements reached at the level of the OECD when it was called to address several challenges on the tax treatment of investment structures. In particular, members of the inclusive framework should be aware of the work of the OECD Committee on Fiscal Affairs, regarding the granting of treaty benefits for CIVs and the subsequent work on the principal purposes test or “PPT” rule.
In general, EFAMA is very supportive of the work of the OECD Secretariat and members of Inclusive Framework with respect to investment management industry that is being acknowledged and catered for in the blueprints, in particular: i) Paragraphs 135 to 140 of the report on Pillar One blueprints; ii) Paragraphs 71 to 83 of the report on Pillar Two blueprints.
With respect to Pillar One, the OECD and the Inclusive Framework should agree that all type of activities of investment managers do, and should, fall outside the scope of Consumer-Facing Business.
With respect to Pillar Two, EFAMA very much welcomes the efforts made by the OECD Secretariat and members of the Inclusive Framework to include investment funds in the list of excluded entities.