Why BEPS Compliance Might be a Good Thing
Summary
The impetus to create this new standard arose from a number of high-profile cases in which large multinational corporations were found to be minimizing their tax liabilities by shifting their profits to low-tax jurisdictions. The Organization for Economic Development (OECD) created BEPS as a set of non-binding rules, initially to address the challenges of taxation in the context of the so-called information economy. Although the OECD has no authority to set tax rates or rules within the 139 countries that make up the organization, it has proposed a framework which member nations may choose to adopt through their own respective legislative processes. The new regimen is expected to increase effective global tax rates for a majority of companies, and it will require organizations to align with a whole new set of rules that will govern transfer pricing and permanent establishment. Over the past year, our team has been meeting with top global CPA firms, leaders at multinational companies, and other key stakeholders to understand the full implications of BEPS for our clients.
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