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Practitioners Look to Europe in Search for Possible OECD Next Steps on Base Erosion Project

This article explains and comments on the Organisation for Economic Co-Operation and Development (OECD) report of February 12, 2013 calling for a coordinated multi-jurisdictional approach to combating Base Erosion and Profit Shifting (BEPS) by multinational companies. The OECD report shows that because current international tax standards have not kept pace with changes in global business practices, large and sophisticated taxpayers doing business across borders may be able to achieve single digit effective tax rates while their smaller counterparts, who often only operate domestically, pay tax at higher effective rates. The OECD said that given the urgency of the matter, it was looking to draft an initial action plan within six months in time for the Committee on Fiscal Affairs’ next meeting in June 2013. The action plan will identify actions needed to address BEPS, impose deadlines, and consider the resources and methodology required to implement solutions. Such a plan would require the contribution of all stakeholders, including taxpayers and their advisors.

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