Action 4 of the OECD Action Plan on Base Erosion and Profit Shifting Initiative : Interest and Base-Eroding Payments - Insights from the Canadian Experience

Among the actions identified by the OECD to address base erosion and profit shifting (BEPS), one of the most challenging is Action 4, which is intended to limit base erosion effected by way of interest deductions and other financial payments. This short article reviews Canadian experience that may be relevant to the implementation of BEPS Action 4 at a national level. In particular, Canadian experience suggests that countries acting on a unilateral basis are apt to be more concerned about base erosion by non-residents than by residents, suggesting that bilateral or multilateral agreement may be necessary for meaningful progress