Base Erosion and Profit Shifting (BEPS)

A shifting landscape

Base Erosion and Profit Shifting (BEPS)

The Organisation for Economic Cooperation and Development (OECD) is leading the charge via its BEPS Project to create common standards around how multinational companies structure their international operations from a tax perspective. It has released a number of draft papers in September 2014 (see attached Deloitte Commentary) and follow-up discussion drafts in recent months to seek the views of stakeholders on key actions under the BEPS Action Plan.

Some OECD member countries, such as the United Kingdom, have even taken unilateral measures to increase their tax take from multinationals, as is the case with the UK’s Diverted Profits Tax. However it is clear that any such unilateral measures will need to be compatible with BEPS in order to survive in a post-BEPS era.

In addition, the European Commission has been reviewing certain tax ruling practices from certain countries and has recently made a decision to extend its review of tax ruling practices to all Member States.

The idea of a Common Consolidated Corporate Tax Base for the EU has been raised by a number of commentators, as well, though this is anathema to the governments of several EU Member States.

The landscape is clearly shifting, however, and this is causing a great deal of tax uncertainty for business leaders, who are rightly concerned that greater certainty is vital for investment and job creation.

Deloitte has been active in both monitoring and advising on BEPS developments in Ireland, in other OECD members and globally.

Deloitte is also contributing to the conversation about setting tax policy and raising awareness within the business community of the potential outcomes of the BEPS Project and their implications.

Our team of international tax specialists have the depth of knowledge and experience needed to provide business leaders with greater insight into the processes now unfolding. We are helping clients to prepare for the tax system of the future through advising them on actions to take now to mitigate the impact of the BEPS Project on their effective tax rates.

If you have any questions about the OECD’s BEPS Project or how the current focus on BEPS might have an impact on your business, please do not hesitate to contact us.

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