(BEPS) is a phenomenon that has gained significant attention in recent years due to its impact on global taxation. BEPS refers to the practice of multinational companies shifting their profits from higher-tax jurisdictions to lower-tax or no-tax locations, thus eroding the tax base of the higher-tax countries.
The issue arises when multinational companies use tax planning strategies to move profits to low-tax jurisdictions or tax havens where there is little or no economic activity. This is often done through deductible payments such as interest or royalties, which reduce the taxable income of the company in high-tax countries and increase profits in low-tax jurisdictions.
The Organisation for Economic Co-operation and Development (OECD) estimates that governments may be losing up to $240 billion annually in tax revenues due to BEPS practices. This has led to a significant increase in attention from governments around the world, who are now taking steps to address the issue.
The OECD has developed policies to tackle BEPS, known as the BEPS project. The project consists of 15 action items that aim to address the tax challenges arising from BEPS practices. These actions include the development of new international standards for transfer pricing, country-by-country reporting, and the limitation of interest deductions.
One of the key aims of the BEPS project is to ensure that multinational companies pay their fair share of taxes, regardless of where they are located. This involves addressing the tax challenges arising from the digital economy, which has made it easier for companies to move profits to low-tax jurisdictions without any physical presence in those countries.
The BEPS project has already had a significant impact on global taxation, with many countries implementing new legislation to address BEPS practices. For example, in the United States, the Tax Cuts and Jobs Act of 2017 introduced a number of provisions aimed at preventing BEPS practices, including the limitation of interest deductions and the introduction of a base erosion anti-abuse tax.
Overall, the issue of BEPS is a complex and multifaceted one, requiring international cooperation to address. The BEPS project is an important step towards ensuring that multinational companies pay their fair share of taxes and that governments around the world can maintain their tax base. As the global economy continues to evolve, it is likely that the issue of BEPS will remain a significant concern for governments and taxpayers alike.
Regville Associates offers end-to-end legal, secretarial, tax and compliance service for companies. Our services aid companies in achieving and sustaining compliance with regulations.
Feel free to contact us.
Tolulope Oguntade Regville Associates info@regville.com 08065111667
Aspiring entrepreneurs and startups seeking investment capital need to create compelling pitch decks that convey the essence of their business idea to investors. A pitch deck is a visual presentation that provides investors with a concise overview of a company’s business model, market opportunity, and team. Creating a successful pitch deck can make the difference between securing funding and failing to attract investor interest. Here are some key elements that entrepreneurs should include in their pitch decks to attract investor attention.