BEPS project and its global reflections

Akif Tunç
Efe Can Akgül

BEPS (“Base Erosion and Profit Shifting”) project is initiated by the collaboration of G20 and OECD in order to cope with the issues arising from the harmful tax practices.
 

Action 1

Addressing the tax challenges of the digital economy

Action 2

Neutralise the effects of hybrid mismatch arrangements

Action 3

Strengthen controlled foreign companies rules

Action 4

Limit base erosion via interest deductions and other financial payments

Action 5

Counter harmful tax practices more effectively, taking into account transparency and substance

Action 6

Prevent treaty abuse

Action 7

Prevent the artificial avoidance of permanent establishment status

Action 8

Aligning transfer pricing outcomes with value creation: Intangibles

Action 9

Aligning transfer pricing outcomes with value creation: Risks & Capital

Action 10

Aligning transfer pricing outcomes with value creation: High-risk transactions

Action 11

Establish methodologies to collect and analyse data on BEPS and the actions to address it

Action 12

Require taxpayers to disclose their aggressive tax planning arrangements

Action 13

Re-examine transfer pricing documentation

Action 14

Make dispute resolution mechanisms more effective

Action 15

Develop a multilateral instrument

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Figure 1: BEPS actions

 

In spite of the advisory character for the OECD and G20 countries, the BEPS initiative has been observed to have significant effect on the adoption of the BEPS actions in domestic laws of the world countries, particularly OECD and G20 countries, in line with the developments during initiation process of BEPS.

 

When the BEPS actions are analyzed it is observed that the conversion to UN Model which gives the right of taxation to residence country from OECD model which gives the right of taxation to source country will be realized in the direction of the transparency, sustainability and substance/principal purpose.

 

In this respect, the latest worldwide BEPS developments in the tax environment will be mentioned by giving examples from big economies in a post-BEPS world.

 

 

 

 

 

 

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