What is the local impact of Base Erosion and Profit Shifting (BEPS) anti-tax avoidance initiatives?

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Changing international tax landscape

Local impact of Base Erosion and Profit Shifting (BEPS) Project

OECD’s BEPS Project aims to provide governments/ tax administrators with clear international solutions for fighting aggressive corporate tax planning strategies that artificially shift profits to locations where they are subjected to more favourable tax treatment.

The Organisation for Economic Corporation and Development (OECD) on 16 September 2014 published the first set of reports and recommendations on its BEPS action plans.

The BEPS action plan was endorsed by the G20 in July 2013 and it identifies 15 key areas to be addressed by 2015 in order to address loopholes and gaps in the current domestic and international tax system. These loopholes and gaps are seen as creating opportunities for taxpayers who are involved in cross-border activities to aggressively structure their activities to mitigate potential tax exposure or achieve no tax liability.

OECD’s BEPS Project aims to provide governments/ tax administrators with clear international solutions for fighting aggressive corporate tax planning strategies that artificially shift profits to locations where they are subjected to more favourable tax treatment.

The concept of ‘fair taxes’ is at the heart of the BEPS discussions. It considers if taxpayers are paying adequate amount of tax in jurisdictions where the income-generating activities are performed, or whether the income is being artificially moved away to other jurisdictions resulting in the taxpayers paying little or no taxes on the income.

In this newsletter, we present an overview of the various BEPS actions plans, as well as synopsis of the recommendations contained in the reports of the 7 Action Plans that were released on 16 September 2014.  We also highlight anticipated impact of the 7 Actions Plans on the Nigerian tax landscape.

What is the local impact of Base Erosion and Profit Shifting (BEPS) anti-tax avoidance initiatives?
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