On 11 July 2023, 138 members of the OECD/G20 Inclusive Framework on BEPS agreed an Outcome Statement recognising the significant progress made and allowing countries and jurisdictions to move forward with historic, major reform of the international tax system.PARIS, July 1 (TAXEDO) – At the end of June, the Paris-based Organisation for Economic Cooperation and Development (OECD), hosted talks about plans to reform international taxation rules and ensure that multinational enterprises (MNEs) pay a fair share of tax wherever they operate. The current international tax system, “which is no longer fit for purpose in a globalised and digitalised 21st century economy” (source OECD), must see some updates.
Domestic tax base erosion and profit shifting (BEPS) due to multinational enterprises exploiting gaps and mismatches between different countries’ tax systems affects all countries. Developing countries’ higher reliance on corporate income tax means they suffer from BEPS disproportionately.
Business operates internationally, so governments must act together to tackle BEPS and restore trust in domestic and international tax systems. BEPS practices cost countries 100-240 billion USD in lost revenue annually, which is the equivalent to 4-10% of the global corporate income tax revenue.
Working together in the OECD/G20 Inclusive Framework on BEPS, over 135 countries and jurisdictions are implementing 15 Actions to tackle tax avoidance, improve the coherence of international tax rules, ensure a more transparent tax environment and address the tax challenges arising from the digitalisation of the economy.
Source & Copyright: OECD