Base Erosion and Profit Shifting (BEPS)

A Clear Perspective, from Every Angle

Multinational corporations and governments are preparing for international tax reform now that the OECD has completed the G20 BEPS initiative.

Many tax authorities are actively working to develop supporting legislation that will take effect in the coming months. New global tax requirements will result in the need for worldwide standardization of data collection and processes, centralized control, up-to-date monitoring of global transfer pricing legislation updates, and accurate risk assessment.

With a clear perspective, you can see all the details from every angle. Thomson Reuters solutions empower you with up-to-date knowledge, analysis and documentation tools to respond, comply, and advise as new laws and standards are passed on a country-by-country basis.


BEPS Basics

What is BEPS?

The Organization for Economic Cooperation and Development (OECD)’s Base Erosion and Profit Shifting (BEPS) initiative seeks to close gaps in international taxation for companies that allegedly avoid taxation or reduce tax burden in their home country by engaging in tax inversions (moving operations) or by migrating intangibles to lower tax jurisdictions.

The OECD has issued 15 Action Items to address the main areas where they feel companies have been most aggressively accomplishing this shifting of profit — addressing the digital economy, treaty abuse, transfer pricing documentation, and more. BEPS Action Item 13, in particular, aims to transform transfer pricing documentation, forcing multinational corporations to reconsider how transfer pricing details are reported to local tax authorities as well as worldwide with country-by-country reporting.

The OECD issued the final recommendations on the 15 Action Items on October 5, 2015. The next steps will be to design and put in place an inclusive framework for monitoring BEPS and supporting implementation of the measures. A significant shift in the overall dynamics of international tax planning and compliance is imminent.

Why should my organization be concerned about BEPS?

BEPS will result in a fundamental transformation of the global tax regulatory landscape. Because the OECD is not a government, it will require the tax authorities at countries around the world to pass laws and regulations to support the BEPS Action Plan and compel companies to comply with those rules. As a result, countries will pass domestic tax laws and sign on to treaties and other multinational agreements to support the Action Items as they see fit.

As this transformation occurs, consequences for non-compliance will become more costly, onerous and time consuming, and may result in media scrutiny. As robust and consistent tax documentation becomes a requirement, you will want to ensure your organization optimizes its current processes to minimize risk and maintain your reputation.

Why should you act now in preparing a BEPS strategy?

As countries pass domestic legislation in support of BEPS, changes to the international tax reporting landscape will present new challenges for multinational corporations and their advisors, requiring time, planning and resources to implement the necessary processes to ensure compliance.

The best defense is to implement research and technology tools that will allow you to act early and with confidence, giving your tax department the support they need to demonstrate their position. Acting early can help alleviate increased pressures and risks on tax departments and finance operations, as MNCs will need to deliver transparent BEPS reporting to required authorities with efficiency, accuracy, and reduced risk of audit.

What are the benefits of leveraging transfer pricing technology in a post-BEPS world?

Transfer pricing documentation is already no easy feat. As the BEPS Action Plan is finalized, strenuous and evolving requirements will necessitate transparency to underlying data and a consistent policy of value creation. With information sourced from various functional groups and locations, technology serves as a central repository for data collection, consolidation, and consistent reporting. Leveraging technology enables you to dedicate time to transfer pricing planning, value chain transformation, and more to address demanding tax authorities in the new, transparent transfer pricing environment.

BEPS Action Items

Action 1: Challenges of digital economy
Action 2: Hybrid mismatches
Action 3: CFC rules
Action 4: Excessive interest deductions
Action 5: Harmful tax practices and transparency
Action 6: Treaty Abuse
Action 7: PE avoidance
Action 8: Transfer pricing — intangibles
Action 9: Transfer pricing — risk and capital
Action 10: Transfer pricing — high-risk transactions
Action 11: Collect and analyze BEPS data
Action 12: Disclosure of aggressive planning arrangements
Action 13: Transfer pricing documentation
Action 14: Dispute Resolution
Action 15: Multilateral BEPS instrument

Preparing for BEPS

How are global jurisdictions and multinational corporations reacting to and preparing for BEPS? Our analysis discusses the impact of emerging legislation, provides insights, and shares best practices to help you comply.

BEPS CBC Reporting for Multinationals

BEPS Filing Requirements for Multinationals Under Country-by-Country Reporting

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Anti-Tax Avoidance Report

European Commission Presents Anti-Tax Avoidance Package

Download Special Report
Action 13 Guide

BEPS Action 13 Guide

Download Guide
BEPS-Survey-Cover

2015 Global BEPS Readiness Survey Report

Download Survey Report
BEPS Infographic

2015 Survey Report Infographic

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Recent BEPS-Related Blog Posts

Piazza Navona, Rome. Italy

Italy Issues Guidance on Patent Box Election Requirements

(5/26/2016) - On May 6, 2016, the Italian tax authorities (ITA) issued Protocol No. 67014 concerning procedures for obtaining advance tax rulings for qualifying taxpayers electing application of the patent box regime. Starting May 6, 2016, qualifying taxpayers with turnover (or gross revenues) up to €300 million must submit their applications (and related supporting documentation) [...] Continue Reading

iStock_000003073546_Small

Austrian Ministry of Finance Issues Draft Transfer Pricing Documentation Legislation

(5/23/2016) - On May 11, 2016, the Austrian Ministry of Finance published a draft version of the EU Tax Amendment Act 2016 (EU-Abgabenänderungsgesetz 2016) and submitted it for approval. The draft bill provides for the implementation of country-by-country reporting (CbCR), as recommended by OECD BEPS Action 13 and the implementation of the Directive [...] Continue Reading

Read more BEPS-related blog posts

Videos

Tax Talk

In our exclusive video interview series, we discuss hot tax topics with leaders in the tax and finance industries.

OECD’s Pascal Saint-Amans on Rewriting the Tax Rulebook

Reuters’ Editor-at-Large Axel Threlfall discusses a range of issues including the delivery of the Base Erosion Profit Shifting Action Plan and potential issues arising from the G20 Leaders Summit in Turkey later this year with the OECD’s Pascal Saint-Amans.


Pascal Saint-Amans

OECD’s Pascal Saint-Amans on Rewriting the Tax Rulebook

Reuters’ Editor-at-Large Axel Threlfall discusses a range of issues including the delivery of the Base Erosion Profit…

OECD’s Pascal Saint-Amans on Rewriting the Tax Rulebook

Reuters’ Editor-at-Large Axel Threlfall discusses a range of issues including the delivery of the Base Erosion Profit Shifting Action Plan and potential issues arising from the G20 Leaders Summit in Turkey later this year with the OECD’s Pascal Saint-Amans.

Brian Peccarelli

Transfer Pricing is a Key Challenge for Multinational Corporations

Brian Peccarelli, president, Tax & Accounting and Sam Cicogna, head of ONESOURCE Transfer Pricing weigh in on how multinational…

Transfer Pricing is a Key Challenge for Multinational Corporations

Brian Peccarelli, president, Tax & Accounting and Sam Cicogna, head of ONESOURCE Transfer Pricing weigh in on how multinational corporations have been reacting to the OECD’s BEPS Action Plan.

Porus Kaka interview 1

As Countries Gear Up for BEPS Implementation, Corporations…

At the International Fiscal Association’s (IFA) 2015 Annual Congress in Basel, Switzerland, Reuters Editor-at-Large…

As Countries Gear Up for BEPS Implementation, Corporations Have Concerns

At the International Fiscal Association’s (IFA) 2015 Annual Congress in Basel, Switzerland, Reuters Editor-at-Large Axel Threlfall spoke with IFA President Porus Kaka about the challenges of BEPS implementation.

Steve Mendelsohn interview

Companies Looking for Guidance on BEPS Have Concerns About…

Axel Threlfall speaks with Steve Mendelsohn, head of the Knowledge Solutions business at Thomson…

Companies Looking for Guidance on BEPS Have Concerns About Privacy, Compliance, and Uncertainty

Axel Threlfall speaks with Thomson Reuters’ Steve Mendelsohn about the dominant topic at the IFA 2015 Annual Congress: BEPS. Mendelsohn notes that the most pressing concerns for corporations are the BEPS compliance burden, privacy, and potential violations of their intellectual property rights.

Porus Kaka interview 2

IFA President: Taxpayers Need a Bill of Rights

IFA President Porus Kaka talks with Reuters Editor-at-Large Axel Threlfall about the need for a taxpayer bill of…

IFA President: Taxpayers Need a Bill of Rights

IFA President Porus Kaka talks with Reuters Editor-at-Large Axel Threlfall about the need for a taxpayer bill of rights to protect “good corporate taxpayers” in a post-BEPS world.

Various BEPS Impact - various interviews

What Delegates Are Saying About the Impact of IFA 2015 on BEPS

Axel Threlfall looks at final takeaways from conference delegates on how IFA 2015 will impact BEPS.

What Delegates Are Saying About the Impact of IFA 2015 on BEPS

Axel Threlfall looks at final takeaways from conference delegates on how IFA 2015 will impact BEPS.

Preparing for BEPS

Preparing for BEPS

What does BEPS full disclosure really mean? Watch this three minute overview of BEPS, preparation recommendations and resources…

Preparing for BEPS

What does BEPS full disclosure really mean? Watch this three minute overview of BEPS, preparation recommendations and resources available to ease the burden on your tax department.

Events

Talk BEPS with us at one of these upcoming events

OECD International Tax Conference

June 6-7, 2016
Washington D.C.

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International Tax Roundtable — Washington, D.C.

June 8, 2016
Washington, D.C.

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International Tax Roundtable — New York, NY

June 21, 2016
New York, NY

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Global Transfer Pricing Forum – Europe

June 29-30, 2016
Berlin, Germany

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Solutions

Thomson Reuters is your global partner for international tax compliance challenges. Our BEPS research and technology solutions address your immediate and ongoing needs for country-by-country reporting and other Action Items, while providing a solid foundation for future impact on your organization.

BEPS Global Currents

Checkpoint BEPS Global Currents

With a customizable dashboard of the latest BEPS developments, you can respond proactively to new developments, make strategic plans to minimize impact and ensure you are in compliance with new laws and standards as they are passed.

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BEPS Action Manager

ONESOURCE BEPS Action Manager

With up-to-date research, valuable risk assessments and intuitive analytics, multinational tax departments can remain current amidst an ever-evolving legislative landscape—and stay ahead of inquiries from various tax administrations.

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