G20 finance ministers endorse OECD's profit shifting plan
G20 finance ministers meeting in Peru have approved the OECD’s final package of Base Erosion and Profit Shifting (BEPS) 2015 measures.
The comprehensive set of reforms, aimed at changing international tax rules, won strong support for its proposed solutions to close loopholes that allow corporate profits to ‘disappear’ for tax reasons.
Low or no-tax environments
The meeting of finance ministers looked at the way BEPS would change existing international rules surrounding low or no-tax environments.
The ministers agreed to advance the BEPS measures so that G20 heads of state meeting at a summit on 15-16 November in Antalya, Turkey could further discuss the changes.
Angel Gurría, OECD Secretary-General, said: "Base erosion and profit shifting is sapping our economies of the resources needed to jump-start growth, tackle the effects of the global economic crisis and create better opportunities for all."
In all, almost 90 countries worldwide are working together to come up with a multilateral instrument that can integrate the BEPS measures into the existing bilateral treaties already in place.
The new measures were agreed to after a consultation process that took place between OECD, G20 and developing nations over a two-year period.
"Everyone has a stake in reversing base erosion and profit shifting," Gurria explained.
The final package of BEPS measures will see the adoption of new standards, and these will affect country-by-country reporting so that the tax strategies of multinational companies will become more transparent and less open to abuse.