Abstract
This article provides an overview of China’s reaction to the G20/OECD Base Erosion and Profit Shifting (BEPS) project. From 2013 to 2015, the OECD developed a series of actions designed to address BEPS activities by multinational enterprises, culminating in a final report of 15 action steps. The article reviews and explains China’s reaction to the BEPS project and its actions in detail, with a particular focus on transfer pricing issues. It shows that China has actively participated in both developing and implementing the BEPS project. The article further suggests that in the post-BEPS era, China is expected to implement the BEPS project in a more consistent and coherent way, and will take whatever measures necessary to guarantee the successful implementation of the BEPS package in collaboration with the global community.
Highlights
Following the financial crisis of 2008 and ensuing austerity, the OECD and G20 launched theBase Erosion and Profit Shifting (BEPS) project in 2013
China’s tax base has been seriously eroded by aggressive international tax planning that has the effect of artificially shifting profits to locations where they are subject to non-taxation or substantially reduced taxation
As China started to implement the “Going-out” strategy in the 21st century, in particular the initiative of “one belt and one road” (OBOR), more and more China-based corporations are increasingly active in outbound investment and intangibles export oversea
Summary
Following the financial crisis of 2008 and ensuing austerity, the OECD and G20 launched the. China’s tax base has been seriously eroded by aggressive international tax planning that has the effect of artificially shifting profits to locations where they are subject to non-taxation or substantially reduced taxation. As China started to implement the “Going-out” strategy in the 21st century, in particular the initiative of “one belt and one road” (OBOR), more and more China-based corporations are increasingly active in outbound investment and intangibles export oversea. The following sections describe China’s involvement in the BEPS project in detail, with particular emphasis on transfer pricing. They explain why China needs to continue to implement the BEPS action steps and what problems might be anticipated as it does so
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