19 Aug 2013
The erosion of tax bases and the shifting of profits is a very current, very critical concern among many of the G20 nations, as well as some individual governments. The Organisation for Economic Co-operation and Development (OECD) has released a report comprehensively diagnosing the situation around base erosion and profit shifting (BEPS) and proposing the need for an action plan to tackle some key pressure points.
The report suggests that the loss of tax revenue by profit-shifting to lower- tax jurisdictions is an unsustainable symptom of the changing global business environment – particularly the development of the digital economy.
The report acknowledges that there is no silver bullet for addressing BEPS, but positions the OECD as ideally placed to advance a collaborative solution.
The report solicits input for an action plan that the OECD hopes to have fully developed by June 2013. Particular areas of focus include: