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The Base Erosion & Profit Shifting project: A fundamental change to the taxation of international companies

01 October 2016

The BEPS project led by the OECD and G20 has an Action Plan being implemented from 2016-17 in cooperation with national governments to address flaws in international tax rules, specifically the perceived avoidance of tax by companies trading internationally.

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The media spotlight continues to focus on the tax arrangements and alleged tax avoidance of large corporates such as Amazon, Google and Starbucks. However, Alliott Group’s International Corporate Tax Group last week highlighted to member delegates from all over the world that at least one or two of the 15 Action points set out in the BEPS Action Plan will apply to any business that operates across borders, whatever its size.

The Action Plan is based on three core concepts: cohesion; restoring the principles of international frameworks; and greater transparency. It also introduces changes to address the challenges presented by the digital economy.

Every country wants to protect the amount of tax it can collect. However, the G20 and OECD estimate that between US$100-240 billion is lost in corporate income tax annually on a global basis. The overall aim of the BEPS project is to enable every country to tax the profits of business done within their borders, where the value is actually added, and to prevent the avoidance of tax through use of artificial arrangements in low tax jurisdictions.

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Around 60 countries from the OECD and G20 plus a number of developing countries are now committed to the plan.

For more information on BEPS

Alliott Group's International Tax Group is monitoring what is happening at the global level and how different countries around the world are implementing the Action Plan and how that may affect clients.

If any clients are concerned about the impact of BEPS on their business, they are invited to contact Alliott Group's Executive Office directly so that we can coordinate advice from our international tax and transfer pricing experts in specific countries.