Base Erosion and Profit Shifting (BEPS) refers to the tax planning strategies adopted by businesses and corporations that exploit gaps and mismatches in taxation laws and rules to shift profits artificially to low or no-tax locations where there is no economic activity. This adversely affects fairness and integrity of tax systems.
BEPS legislation is intended to combat tax evasion and ensure that countries collect their due taxes enabling them to implement the development plans. BEPS measures are of major importance for developing countries as they significantly rely on corporate income tax, in particular multinational companies. In this context, the ministers of finance of G20 called the Organization for Economic Cooperation and Development (“OECD”) to develop action plan to address BEPS issues.
Therefore, OECD developed the BEPS package, which includes 15 actions providing the governments with local and international tools to address BEPS. These actions ensure that profits are taxed where economic activities generating profits are performed.
BEPS measures include, but are not limited to, the disclosure rules, transfer pricing, developing dispute settlement mechanisms more effectively, and developing a multilateral instruments to modify the bilateral tax treaties in order to implement BEPS actions more efficiently.
Added value to business entities from BEPS framework Services
- Comply with laws, regulations, resolutions and instructions issued by the regulators;
- Sound tax planning is in place to avoid multiple taxation in several jurisdictions;
- Enhance business entity’s reputation and increase all stakeholders’ confidence; and
- Contribute to optimizing national economy capacity, and adherence to international legislations.
Services provided by Baker Tilly
- Attestation of BEPS Compliance Reports as required by the relevant authorities