This paper examined tax base erosion and profit shifting through transfer pricing tbeptp evidenced from nigeria, from the perspective of tax avoidance and from profit shifting manipulative. Prepared by policy and strategy, inland revenue, and the treasury. Oecdg20 base erosion and profit shifting project limiting base erosion involving interest deductions and other financial payments addressing base erosion and profit shifting is a key priority of governments around the globe. Base erosion and profit shifting beps refers to tax planning strategies that allow multinationals to take advantage of gaps and mismatches in international tax laws to reduce or shift profits from high tax jurisdictions to low tax jurisdictions and decrease their overall tax burden.
This has the effect of reducing a companys tax bill below. Oecds base erosion and profit shifting beps initiative and the global tax reset. Subcommittee on base erosion and profit shifting issues. Base erosion and profit shifting beps analysis and india perspective 07 base erosion and profit shifting beps analysis and india perspective 06 tax treaty abuse treaty abuse and in particular, treaty shopping is the most significant source of beps concerns. Developing countries higher reliance on corporate income tax means they suffer from beps disproportionately. The convention is an outcome of the oecd g20 beps project to tackle base erosion and profit shifting through tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or notax locations where there is little or no economic activity, resulting in little or no overall corporate tax being paid. Pwc beps overview timing and process of action plan base erosion and 9. Pdf a tax base erosion and profit shifting through transfer. The beps inclusive framework is a networking body with global reach, as more than half of the 193 countries worldwide have committed themselves to implementing the standards. Oecd ilibrary oecdg20 base erosion and profit shifting. The oecd g20 base erosion and profit shifting project is an oecdg20 project to set up an international framework to combat tax avoidance by multinational enterprises mnes using base erosion and profit shifting tools. Oecdg20 base erosion and profit shifting project limiting. Base erosion and profit shifting in africa united nations economic.
Whilst further work on the data related to base erosion and profit shifting beps is important and necessary, there is no question that beps is a pressing and current issue for a number of jurisdictions. The organisation for economic cooperation and development define beps strategies as also exploiting gaps and mismatches in tax rules. While there are many ways in which domestic tax bases can be eroded, a significant source of base erosion is profit shifting. The g20 and the base erosion and profit shifting beps.
Base erosion and profit shifting refers to the phenomenon where companies shift their profits to other tax jurisdictions, which usually have lower rates, thereby eroding the tax base in india. Treaty abuse occurs when mnes exploit the disparities in domestic and international tax rules. The project, led by the oecds committee on fiscal affairs, began in 20 with oecd and g20 countries, in a context of financial crisis and tax affairs e. At the request of the g20 countries the oecd has launched a project on base erosion and profit shifting beps, with the aim to analyze taxminimizing strategies of multinational enterprises mnes and to address situations where beps takes place.
Base erosion and profit shifting the background 9 10 september 20base erosion and profit shifting reform fundamental systemic change consensusbased organisation building a base in nonmember developing countries so heavy burden of broad consensus requirement pressure to observe fundamental principles existing principles include pes. Base erosion and profit shifting refers to corporate tax planning strategies used by multinationals to shift profits from highertax jurisdictions to lowertax jurisdictions, thus eroding the taxbase of the highertax jurisdictions. Addressing base erosion and profit shifting is a key priority of governments around the globe. The oecd g20 base erosion and profit shifting project or beps project is an oecdg20 project to set up an international framework to combat tax avoidance by multinational enterprises mnes using base erosion and profit shifting tools. It is often achieved by structuring income to have more favourable tax treatment or by finding ways to write off certain expenditure against taxable income. Oecdg20 base erosion and profit shifting project addressing the tax challenges of the digital economy action 1. This site is like a library, you could find million book here by using search box in the header. These revenue losses have increased substantially in. Base erosion and profits shifting beps refers to tax avoidance strategies used by multinational enterprises mnes, which exploit gaps and.
Base erosion and profit shifting beps avoidance strategies enable large enterprises to minimise their tax burden, eroding government revenue bases by strategically transferring profits. In 20, oecd and g20 countries, working together on an equal footing, adopted a. Addressing base erosion and profit shifting base erosion constitutes a serious risk to tax revenues, tax sovereignty and tax fairness for many countries. Tax treaties are typically entered into between two countries to prevent double taxation. The base erosion and profit shifting work is only one of the many initiatives currently in progress in response to the current international climate of concern about tax avoidance and tax evasion. Lately, the frequency of beps has come under intensified scrutiny, particularly in hightax territories. The output under each of the beps action plans is intended to form a complete and cohesive approach covering domestic law recommendations and international principles under the oecd model tax treaty and tp guidelines historic, unprecedented cooperation among countries across the.
The base erosion and profit shifting beps project, an initiative of the organization for economic cooperation and development oecd and the g20 nations was launched in 20 to address the issues of profit shifting and tax avoidance by multinational enterprises mnes. Following the release of the report addressing base erosion and profit shifting in february 20, oecd and g20 countries adopted a 15point action plan to address beps. Oecdg20 base erosion and profit shifting limiting base. Oecd ilibrary addressing base erosion and profit shifting. The profit rates of mne affiliates located in lowertax countries are higher than their groupsaverage worldwide profit rate.
Pdf this paper examined tax base erosion and profit shifting through transfer pricing tbeptp evidenced from nigeria, from the. An examination of the data congressional research service 1 introduction it has been reported with increasing frequency that american corporations are engaging in profit shifting. Action plan on base erosion and profit shifting oecd. This essay provides an overview of existing empirical. Base erosion and profit shifting beps refers to tax planning strategies that exploit. The project on base erosion and profit shifting beps has been the first major multinational effort to reform international tax rules since they were first designed in the 1920s. In 20, the organization for economic cooperation and development oecd launched an action plan to address base erosion and profit shifting, which culminated in a package of 15 actions, which. Introduction recent efforts by the organisation for economic cooperation and development oecd to address corporate tax base erosion and profit shifting beps have been driven by the common understanding that a major renovation of the. Oecds base erosion and profit shifting beps deloitte. Erosion and profit shifting beps undermines the integrity of the tax system, as the. Domestic tax base erosion and profit shifting beps due to multinational enterprises exploiting gaps and mismatches between different countries tax systems affects all countries. Aktivitas ekonomi global dan peran oecd oleh rakhmindyarto, peneliti badan kebijakan fiskal kementerian keuangan ri base erosion and profit shifting beps adalah strategi perencanaan pajak tax planning yang memanfaatkan gap dan kelemahankelemahan yang terdapat dalam peraturan perundangundangan. By basic erosion and profit shifting beps we mean the set of fiscal nature strategies that some companies put in place to erode the tax base heroes base and therefore deduct taxes from the tax authorities. Despite of this, the framework has not made changes to the agenda and content of the.
Base erosion and profit shifting beps training course. Base erosion and profit shifting beps preamble pdf. That is, they are using tax planning strategies to avoid, delay, or reduce their u. Newsletter november 2015 on 5 october 2015, the organization for economic cooperation and development oecd released the final reports of the base erosion and profit shifting beps project. Base erosion and profit shifting wikimili, the best. Subcommittee on base erosion and profit shifting for. Oecdg20 base erosion and profit shifting project issn 232604 print issn 232612 online. Addressing base erosion and profit shifting iterating the need for analyzing the issue of tax base erosion and profit shifting by global corporations. The transfer of profits profit shifting from highimposition countries to countries with no or reduced taxation is, in fact, itself a strategy that leads to the erosion of the tax base. The project, led by the oecds committee on fiscal affairs, began in 20 with oecd and g20 countries, in a context of. Download base erosion and profit shifting beps readingsample book pdf free download link or read online here in pdf. The multilateral efforts, led by the organisation for economic cooperation and development oecd, to address base erosion and profit shifting beps have attracted much attention from tax policy.
Base erosion and profit shifting beps kpmg international. To implement the beps project, with its objective of greater tax integrity, the oecd identified 15. Base erosion and profit shifting beps analysis and india. In 20, oecd and g20 countries, working together on an equal footing, adopted a 15point action plan to address beps. Base erosion and profit shifting beps are taxavoidance strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or notax locations. Treaty shopping is one of the principal methods mnes employ to reduce or avoid taxation. Base erosion, profit shifting and developing countries. Base erosion is the use of financial measures and tax planning to reduce the size of a companys taxable profits in a country. The subcommittee is further mandated to report to the committee, beginning at the eleventh. First published in august 2017by policy and strategy, inland revenue, po box 2198, wellington 6140. Pdf a tax base erosion and profit shifting through. The final package was negotiated by oecd members, the g20 and. Base erosion and profit shifting oecd project wikipedia. Base erosion and profit shifting beps refers to tax planning strategies that allow multinationals to take advantage of gaps and mismatches in.
All books are in clear copy here, and all files are secure so dont worry about it. A roadmap for reform the harvard community has made this article openly available. Oecdg20 action plan on base erosion and profit shifting beps. This report explains the background to the project, analyses the dynamics of the. Oecdg20 base erosion and profit shifting project addressing the tax challenges of the digital economy addressing base erosion and profit shifting is a key priority of governments around the globe. Read online base erosion and profit shifting beps readingsample book pdf free download link book now. Vi lang et al eds, base erosion and profit shifting above all. Oecdg20 base erosion and profit shifting addressing the. Base erosion and profit shifting beps hybrid mismatch. Beps refers to tax planning strategies that exploit gaps and mismatches in tax rules to make profit disappear for tax purpose or to shift profits to locations where there is little or no real activity but taxes are low, resulting in little or no overall corporate tax being paid. In this context, the g20 has welcomed the work that the oecd. The oecd followed it up with publishing draft action plan on base erosion and profit shifting beps action plan in.
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