The BEPS project of the Organisation for Economic Cooperation and Development (OECD) aims to tackle perceived flaws in international tax rules.
BEPS, or Base Erosion and Profit Shifting, is a technical term referring to the negative effect on national tax bases stemming from tax avoidance strategies used by some multinational companies. Transfer pricing techniques are a common way used to achieve BEPS.
The OECD set up an action plan on BEPS that was negotiated with the participation of its member states. It was endorsed by G-20 leaders and finance ministers at their summit in St. Petersburg, Russia, in September 2013.
In a video interview, Pascal Saint-Amans, director of the OECD’s Centre for Tax Policy and Administration, discusses the BEPS project with Thomson Reuters Editor-at-Large Axel Threlfall.
In the interview, Saint-Amans says:
“The common goal is to increase transparency, to level the playing field, to increase competition between players so that tax is not a black hole where you can make a lot of money and be at a competitive advantage compared to your competitors.”
He adds: “The second key principle is to realign the location of the profits with the location of the activities because locating all your profits in a tax haven where nothing is happening is nonsense and is not good for competition.”
You can watch the full interview here, as well as find information on the latest BEPS developments.