BASE EROSION AND PROFIT SHIFTING (BEPS) IN LOW-INCOME NATIONS BY THE MULTINATIONALS: A CRITICAL REVIEW OF LITERATURE

Abstract

The myriad of attention being given to the issue of erosion of tax bases and profit shifting generates opportunities for important researches and tax reforms. BEPS strategies are accomplished by either shifting income to lower tax jurisdiction or shifting deductible expenses to higher tax jurisdictions. Purpose – The purpose of this paper was to critically review how BEPS strategies by MNES impact the revenue-generating ability of low-income nations with a view to identifying gaps and advance recommendations for policy-makers and future studies. Methodology – The Systematic Quantitative Assessment Technique (SQAT), introduced by Pickering & Byrne (2013), was adopted to search for data used in the critical analysis of 53peer-reviewed articles obtained from 10 high impact academic databases. Most of the articles reviewed were empirical studies. Findings – The findings revealed that the rate at which MNEs shift income and profit out from low-income nations to tax havens is regarded as one of the major problems undermining the development of these countries. The discussion provides researchers, with a critical view of the discourse on the subject exposing researchable gaps that will assist policymakers in the countries on how to put in place necessary legal framework to tackle tax avoidance through BEPS.