Abstract
To promote the maximum consensus of the global community on the implementation of the OECD/G20 Final BEPS Package, this paper investigated the magnitude and disasters of BEPS schemes by comparative research and empirical data. This paper analyzed the relevance of ETRs to the magnitude of BEPS, the ratio of corporate tax revenue in GDP in the process of globalization, the relevance of the FDI flows to BEPS, the relevance of the widespread conduit or SPE structures to BEPS schemes and the magnitude of BEPS schemes of U.S.-based MNEs. As the research findings, this paper highlighted the complicated disasters of over speculative BEPS schemes. The BEPS schemes have eroded the integrity of tax bases in both source and residence jurisdictions, deteriorated the quality of the public goods in all relevant jurisdictions, fundamentally undermined the tax justice, imposed unfair burden on domestic taxpayers especially the individuals and small businesses, distorted the free and fair mechanism of market competition, undermined the efficiency of rational market in optimal allocation of the resources and created a booming intermediary industry assisting BEPS, undermined the reasonable trust of global taxpayers in the fairness and integrity of the tax law, hindered the voluntary compliance by the public taxpayers, and injured the reputation of the community of MNEs and worsened off the global business ecology.
Highlights
base erosion and profit shifting (BEPS) is a headline news covered by global mainstream media, and a top priority on the agenda of international organizations
To promote the maximum consensus of the global community on the implementation of the OECD/G20 Final BEPS Package, this paper investigated the magnitude and disasters of BEPS schemes by comparative research and empirical data
The real effect of the BEPS project remains to be evaluated, there is no doubt that the BEPS project will help to tackle the BEPS issues, to empower the governments in collection of tax from the multinational enterprises (MNEs) in a coordinate manner, to level the playing filed for the business community and for the governments, and to restore the public confidence on tax law
Summary
BEPS is a headline news covered by global mainstream media, and a top priority on the agenda of international organizations. Licit tax savings can be defined as commonly accepted forms of tax behaviors that contradict neither the law nor its spirit and are intended to reduce the tax burden This category can be referred to as “legitimate tax planning” (Avi-yonah et al, 2011). In Saint Petersburg in September 2013, the G20 Leaders endorsed an Action Plan to address base erosion and profit shifting (BEPS). On October 5, 2015, the OECD and G20 released the final BEPS package of 13 reports together with the 2015 Final Report of Explanatory Statement It was only two years since the G20 leaders endorsed the ambitious and comprehensive 15-point Action Plan to address BEPS at their meeting in St. Petersburg on 5-6 September 2013. The real effect of the BEPS project remains to be evaluated, there is no doubt that the BEPS project will help to tackle the BEPS issues, to empower the governments in collection of tax from the MNEs in a coordinate manner, to level the playing filed for the business community and for the governments, and to restore the public confidence on tax law
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