Towards A Global Corporate Tax Overhaul
At the G20 Summit on 15-16 November 2014, political leaders reiterated their determination to address base erosion and profit shifting by corporate groups with the objective of reestablishing the integrity and fairness of international tax rules. The result is the continuing evolution in the corporate taxation landscape that will significantly impact corporate legal structures and financing strategies.
Companies are already facing increased scrutiny of their international tax affairs. G20 leaders agreed to automatic exchange of information between tax authorities and to improve transparency of rulings related to preferential tax regimes. The OECD had already delivered a template for country-by-country reporting of corporations’ tax revenues in September 2014. This will require greater cooperation between tax authorities. Companies may also have to engage with individual tax authorities differently and a broader stakeholder community.
This brief overview outlines developments with respect to corporate tax policy at the international and European level and highlights anticipated future developments.
OECD – Base Erosion and Profit Shifting (BEPS) Action Plan
Much of the tax avoidance debate in the international context is anchored in the G20, which mandated the OECD to develop proposals to overhaul the global corporate tax system by end 2015. The OECD programme is seeking to realign corporate taxation with economic activities and value creation, and preventing base erosion and profit shifting (BEPS) by multinational corporations.