Profit Shifting And Tax Base Erosion

This report presents studies and data available regarding the existence and magnitude of base erosion and profit shifting (BEPS), and contains an overview of global developments that have an impact on corporate tax matters.

This action plan, created in response to a request by the G20, identifies a set of domestic and international actions to address the problems of base erosion and profit sharing.

International corporate tax issues are now prominent in public debate, most notably with the current G20-OECD project addressing Base Erosion and Profit Shifting (‘BEPS’). But, while there is considerable empirical evidence for advanced countries on the cross-country fiscal externalities at the heart of these issues, there is almost none for developing countries. This paper uses panel data for 173 countries over 33 years to explore the magnitude and nature of international fiscal externalities, with a particular focus on developing countries and applying a new method enabling a distinguishing between spillover effects through real investment decisions and through avoidance techniques—and quantification of the revenue impact of the latter. The results suggest that spillover effects on the tax base are substantially larger in developing countries than in advanced, and that they imply a likely loss of revenue from BEPS that is both substantially larger for them.

This book provides a comprehensive analysis of current techniques for profit shifting and tax base erosion in the area of corporate taxation and measurement. Firstly, it explains the relevance of the issue at hand – profit shifting and base erosion in the context of the 21st century. In turn, the book provides a comprehensive analysis of available techniques for the identification and measurement of profit shifting and base erosion, which adopt both the macro and micro perspective. It also provides examples from selected post-communist countries now in the EU, including the Czech Republic, Poland and Hungary. Concrete recommendations for economic policy round out the coverage.

Document from the year 2020 in the subject Business economics - Accounting and Taxes, grade: 10, , language: English, abstract: In the Addressing Base Erosion and Profit Shifting Report, there are certain key tax principles and opportunities for Base Erosion and Profit Shifting that have been analyzed, such as jurisdiction to tax, transfer pricing, leverage and anti-avoidance. Further in these key pressure areas of the Report have been discussed in detail as different chapters of this dissertation. As the world becomes more globalized and resources become more internationally mobile, the issue related to international taxation is moving to the forefront of debates surrounding national tax system. The process of globalization has led to increased competition among businesses in the global market place. International taxation generally refers to the tax treatment of cross-national transactions. Since each nation has its own tax rules and the rules of one nation are rarely perfectly meshed with those of another, it is possible that income will be taxed more than once which is sometimes referred to as double taxation or that it will go untaxed by any jurisdiction. To prevent this, usually countries adopt different methods. In principal, two methods of taxation are there i.e. the territorial (or source) system of taxation and the worldwide (or residence) system. Base Erosion and Profit Shifting by the multinational enterprises or by the individuals is one of the current problem by which the whole world suffering. To curb this problem Organisation for Economic Co-operation and Development (OECD) has unveiled its report on Base Erosion and Profit Shifting (BEPS) on 12 February, 2013. The Report has attempted to identify and tackle the global issue of tax base erosion, which in present time has achieved gigantic proportions. There is a growing perception that Governments across world lose substantial revenue due to tax avoidance because of planning aimed at eroding the tax the taxable base or shifting profits to favorable tax jurisdiction. Keeping cognizance of this situation, the Organisation for Economic Co-operation and Development (OECD) recommends a holistic and planned approach to address the problem of Base Erosion and Profit Shifting (BEPS).

Addressing base erosion and profit shifting (BEPS) is a key priority of governments. In 2013, OECD and G20 countries, working together on an equal footing, adopted a 15-point Action Plan to address BEPS. This publication is the final report for Action 3.

This book provides a comprehensive analysis of current techniques for profit shifting and tax base erosion in the area of corporate taxation and measurement. Firstly, it explains the relevance of the issue at hand - profit shifting and base erosion in the context of the 21st century. In turn, the book provides a comprehensive analysis of available techniques for the identification and measurement of profit shifting and base erosion, which adopt both the macro and micro perspective. It also provides examples from selected post-communist countries now in the EU, including the Czech Republic, Poland and Hungary. Concrete recommendations for economic policy round out the coverage.

Addressing base erosion and profit shifting (BEPS) is a key priority of governments. In 2013, OECD and G20 countries, working together on an equal footing, adopted a 15-point Action Plan to address BEPS. This publication is the final report for Action 12.