BEPS Action 5: Latest Peer review update

It has been well of a decade since Base Erosion and Profit Shifting (BEPS) was introduced and a series of action points put forward for member States to adopt over time, one of those was in relation to “harmful tax practices”.

Action 5 and the Commitment to Counter Harmful Tax Practices

Under the OECD/G20 Inclusive Framework on BEPS, member jurisdictions have committed to countering harmful tax practices through the implementation of internationally agreed minimum standards. BEPS Action 5 sits at the centre of this commitment and places particular emphasis on transparency. It also requires the compulsory spontaneous exchange of information on certain taxpayer‑specific rulings.

The transparency framework established under Action 5 seeks to ensure that tax administrations are adequately informed of rulings granted in other jurisdictions that may give rise to base erosion or profit shifting concerns. By enhancing the flow of relevant information between competent authorities, the framework promotes greater co‑operation. It also helps support a level playing field in international taxation

Core Elements Assessed Through Peer Review

To ensure consistent and effective implementation, the Inclusive Framework conducts peer reviews of participating jurisdictions. These reviews assess compliance with core elements of the transparency framework:

• The information-gathering process
• Exchange of information
• Confidentiality
• Statistics

The latest peer review findings on preferential tax regimes and no or only nominal tax jurisdictions demonstrate sustained global progress in countering harmful tax practices. They also highlight strengthened transparency in line with the BEPS Action 5 minimum standard.

At its meeting in November 2025, the OECD Forum on Harmful Tax Practices (FHTP) reached new conclusions in respect of eight preferential regimes and completed its fifth annual monitoring exercise concerning the substantial activities requirements applicable in no or only nominal tax jurisdictions.

Assessment of New Regimes

Three newly introduced regimes were examined during the review cycle. Of these, two regimes — those of Ireland and Peru — were assessed as not harmful, indicating alignment with the substantial activities and transparency criteria set out under Action 5. In contrast, one regime in Fiji was found to have been abolished prior to the conclusion of the review process.

Monitoring of Substantial Activities Factors

The FHTP also completed its fifth annual monitoring of substantial activities requirements in no or only nominal tax jurisdictions.

The monitoring results indicate that the majority of reviewed jurisdictions are fully compliant with the BEPS Action 5 minimum standard. This represents a significant achievement in reinforcing the integrity of tax systems that might otherwise present risks of profit shifting without corresponding economic activity.

However, focused monitoring will be undertaken in respect of Anguilla and Turks and Caicos Islands, where specific areas require substantial improvement.

Since the launch of the BEPS Project, FHTP has reviewed a total of 326 preferential regimes. Notably, almost 40 per cent of these regimes have been abolished. This figure reflects the tangible impact of the Action 5 framework in reshaping domestic tax legislation and administrative practices worldwide.

The cumulative results of these reviews confirm that jurisdictions are increasingly aligning their tax systems with internationally agreed standards. Through rigorous peer review, transparent publication of findings, and ongoing monitoring, the Action 5 minimum standard continues to serve as a cornerstone in the global effort to prevent harmful tax practices. It also plays a central role in promoting fair and responsible tax governance.

How we can help

If you would like tailored guidance on how these developments may impact your organisation, please contact us. You can also speak to a member of our International Services team on 01293 227670.