Base Erosion and Profit Shifting (BEPS): Pros and Cons between Companies and Governments

Abstract

The purpose of this study was to evaluate the pros and cons between multinational companies and the government on Base Erosion and Profit Shifting (BEPS). The research method used is a qualitative method. This method is used to evaluate cases. This research will discuss about Base Erosion and Profit Shifting (BEPS), the cause and effect of the pros and cons between multinational companies and the government and discuss suitable solutions to overcome these pros and cons. In addition, researchers also offer an idea that is expected to be a solution. The idea is to allocate corporate income tax rates to dividend income tax. Corporate income tax in Indonesia is 25% and the dividend income tax is 10%. If the tax rate is allocated, such as corporate income tax of 15% and dividend income tax of 20%, then multinational companies will tend to allocate their corporate profits from other countries to our country. The allocated profit will increase the payable tax and ultimately increase the State's income. According to the statement, it can be concluded that company profits have a positive effect on state revenues, so that if the government can make good use of Base Erosion and Profit Shifting (BEPS), then Base Erosion and Profit Shifting (BEPS) can have a positive impact on our country.