Basic Erosion and Profit Shifting (BEPS)

Abstract

BEPS refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to locations with no/low tax rates and no/little economic activity, resulting in: l little or no corporate tax being paid. l annual revenue losses for governments of at least 100-240 billion USD, equivalent to 4-10% of global corporate income tax revenue. OECD/G20 Inclusive Framework on BEPS 2015 Under the OECD/G20 BEPS Project, over 60 countries delivered 15 Actions to tackle tax avoidance, improve the coherence of international tax rules and ensure a more transparent tax environment (BEPS package). 2016 The OECD/G20 Inclusive Framework on BEPS (IF) was established to ensure interested countries and jurisdictions, including developing economies, can participate on an equal footing in the development of standards on BEPS related issues, while reviewing and monitoring the implementation of the OECD/G20 BEPS Project. 2017 The first high-level signing ceremony of the Multilateral Instrument (MLI) took place. To date, more than 90 jurisdictions have signed the MLI, which enables the efficient implementation of tax treaty related BEPS measures without the need to bilaterally renegotiate individual tax treaties. Over 1 680 tax treaties will be modified. Over 135 Members of the Inclusive Framework 68% 26% 6%