What is BEPS?A BEPS definition

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.

Does BEPS impact my organization?

It’s very possible. To learn more about how organizations are impacted by BEPS, the importance of planning a BEPS strategy, and how we at Thomson Reuters can help you be prepared, take a look at our BEPS overview.

Learn more in our BEPS overview

What is BEPS? A definition by Thomson Reuters, the Answer Company