The G20/OECD BEPS Project on corporate tax: a scorecard

BEPSIn 2013 the G20 world leaders mandated the OECD, a club of rich countries, for its Base Erosion and Profit Shifting (BEPS) project to produce reforms of international tax rules that would ensure that multinational enterprises could be taxed ‘where economic activities take place and where value is created’, and that developing countries should also be able to benefit. (We have written about this many times, here.)

Now the Global Alliance for Tax Justice (GATJ) has issued a statement, timed to co-incide with the C20 meetings in Turkey.

Its key points are:

  • Although the Organisation for Economic Co-operation and Development (OECD) has extended participation in this work to all G20 countries, and more recently some other developing countries and regional tax administration networks, it cannot substitute for a truly inclusive global tax body. While important developing country members of the G20, such as India, have demanded such an institution, at the Third International Conference on Financing for Development (FFD3) held in Ethiopia in July 2015, key OECD countries vetoed proposals from developing countries to create a global tax body.
  • Reform is long overdue not only to the institutional framework but also to the existing global taxation rules, which are now over 80 years old. The fundamental flaw of these rules is that they have been interpreted to require taxation of MNEs as if their various constituent entities are independent of each other and dealing ‘at arm’s length’. This creates a perverse incentive to create complex and fragmented corporate structures, locating affiliates in convenient jurisdictions to minimise tax; MNEs now consist of often hundreds of such entities. The G20 mandate implied a new approach, but the OECD refused to make it explicit. The result is a patch-up approach that will make international tax rules even more complex, and will largely retain the scope for countries to offer tax breaks.

  • The one limited success is country-by-country reporting [TJN: but also see our concerns here].

Read the whole GATJ document here, or in pdf form here.

Note: the BEPS Monitoring Group, a civil society umbrella grouping led by TJN Senior Adviser Sol Picciotto, will be producing a more detailed critique soon.



Related Posts

UN must defend target to curtail multinational companies’ tax abuse

Photo by Luca Santori, Creative Commons LicenseThe Tax Justice Network, The Independent Commission for the Reform of International Corporate Taxation, and the Global Alliance for Tax Justice call on the UN Secretary General to make sure the commitment to action on tax abuses by multinational companies remains part of the new UN Sustainable Development Goals.


The BVI: Responsible for worldwide tax losses of $37.5 billion a year

BVI report blogAn extraordinary report by consultants Capital Economics, for BVI Finance, claims that the British Virgin Islands are responsible for $1.5 trillion of assets invested around the world, and that these result in 2.2 million jobs and $15 billion in tax revenue. A better approximation would be that the BVI imposes global tax losses of $37.5 […]


Event: Making Tax Work for Women in the UK and Globally

Invitation_ Tax and Gender eventOn Wednesday 28th June 2017 at 16.30 our very own Liz Nelson will be speaking at an event in London that aims to bring together gender and tax justice advocates to highlight the need for coherent and gender-responsive fiscal policies to safeguard the rights of women and girls both in the UK and globally. The […]


Historic event on women, human rights and tax justice in Bogota

BogotaLast week civil society organisations, researchers, labour union activists and policy makers met in Bogota, Colombia to explore how tax justice issues can ensure governments, multinational corporations and others meet their obligations to women in order to secure their full range of human rights. The Women’s Rights and Tax Justice conference opened with a conversation […]


The Offshore Wrapper: the Panama Papers, one year on

Photos from the Protest outside PwC 1 Embankment Place, part of the Global week of action for tax justiceWelcome to the Offshore Wrapper – your weekly update from TJN.  Happy Paniversary! This week it’s been one year since the Panama Papers were leaked, and a number of organisations around the world have been marking the occasion though the global week of action for tax justice. In London, activists from the TJN and the […]


Leave a Reply

Your email address will not be published. Required fields are marked *

Back to Top