Introduction to BEPS

Abstract

This chapter describes the political and economic landscape that lead to the creation of the OECD/G20 Base Erosion and Profit Shifting (BEPS) Project alongside the core principles of the framework. The tax planning practices of multinational enterprises are undergoing unprecedented levels of media scrutiny, with household name companies such as Apple and Google making headlines with their tax avoidance strategies. Tax base erosion and profit shifting methodologies are a popular tool for multinational businesses to minimise their effective tax rate—this chapter discusses some of the key features of these methodologies, as well as the measures that the OECD BEPS Project is introducing to shut down the loopholes that have helped enable cross-border tax avoidance and evasion.