BEPS plans - further power to tax authorities but progress is slow
First published in the Global Banking & Finance Review, 18 September 2014
The OECD’s BEPS Action Plan is designed to redefine and revolutionise the taxation of companies across the globe. It is the most coordinated attempt to reach common objectives – in both developed and developing economies – that we have seen in some time.
But it’s clear from today’s press conference that whilst the OECD’s plans are undoubtedly a further step to tilt the balance of power further towards tax authorities, how they will be implemented and the form they will take is very much unknown.
Multinationals should be concerned that in many ways, the OECD Action Plan legitimises the aggressiveness we have already seen from tax authorities towards taxpayers, particularly in areas such as transfer pricing. Time will tell whether all of the OECD’s BEPS initiatives will be implemented and indeed how they will be enforced, but there is still cause for concern.
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Companies should be prepared for this impending transformation in taxation which BEPS will enforce. It’s clear that there is a general consensus amongst nations that these issues need to be addressed. But for now it appears business as usual whilst the OECD continues its lengthy deliberation over the form it will take.