Base Erosion and Profit Shifting (BEPS)

Since its launch in 2013, TMF Group has closely monitored the OECD/G20’s Base Erosion and Profit Shifting (BEPS) project which will fundamentally transform the global tax landscape. It is at the forefront of political and ethical debate driving transparency, consistency and sharing of information between tax authorities. It is our aim to help our clients meet the challenges of multi-jurisdictional tax operations, including compliance, reporting and risk management for direct and indirect taxes.

TMF Group, with over 6,500 experts in more than 80 countries, is keeping a close eye on the OECD (Organisation for Economic Co-operation and Development) and G20’s BEPS initiative. Tax collaboration at the government level historically occurred bilaterally between two countries through treaties. Through initiatives such as BEPS, local country legislation will to a far greater influenced by a collective philosophy among nations around minimum standards and best practices.

The aims of the BEPS project are to:

  • Eliminate tax mismatches
  • Align profits with the creation of value
  • Increase levels of transparency with tax authorities
  • Create a consistent global tax platform

In addition to BEPS, ethical debates on the topic of corporate taxation continue to make the headlines whilst the governments themselves are under pressure to collect additional revenues.

Country by Country Reporting

A key output of the proposals by the G20/OECD is that in 2017, ‘Country by Country’ (CbC) reporting will take effect, involving each country’s tax authorities storing information to a defined template which would then be shared across all of a multinationals locations to drive transparency.

It is also recommended that businesses provide a:

  • ‘Master file’ detailing transfer pricing policies for all categories of inter-country transactions related to a business
  • And a ‘local file’ that discloses and analyses the activities that are taking place in each country.

Tax authorities should benefit from CbC driving greater transparency into companies global operations and supply chains.

For companies, CbC introduces a new level of complexity to global compliance. The volume of change simultaneously across such a large number of jurisdictions provides a testing challenge whilst also dramatically increasing the risk of non-compliance.

BEPS and CbC represent a new dawn of international tax and companies must quickly adapt to the new environment. Tax authorities, stakeholders and investors will increasingly be concerned and it is up to internal tax departments to respond.

TMF Group is leading the way for helping Multi-National Corporations adapt and prepare for the changes introduced by BEPS and CbC.

Should you be interested in our services or have any questions, please fill in our ‘make an enquiry’ form and we will get in touch with you as soon as we can.

Case Studies

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