BEPS, or Base Erosion and Profit Shifting, describes tax avoidance strategies by multinational companies. These tactics exploit gaps in international tax rules,...
BEPS stands for Base Erosion and Profit Shifting. It refers to tax planning strategies used by multinational enterprises to exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations.
The primary goal of the OECD/G20 BEPS Project is to ensure that profits are taxed where economic activities generating those profits are performed and where value is created, combating artificial profit shifting and tax avoidance.
The BEPS initiative is primarily led by the Organisation for Economic Co-operation and Development (OECD) and the G20 countries. Over 140 countries and jurisdictions are now part of the Inclusive Framework on BEPS.
The current BEPS reform efforts are focused on two pillars: Pillar One addresses the allocation of taxing rights to market jurisdictions, and Pillar Two aims to establish a global minimum corporate tax rate.
BEPS significantly reduces national tax revenues, distorts competition, and shifts a greater tax burden onto individuals and smaller businesses, thereby undermining the fairness and integrity of tax systems globally.