The G20 and the "base erosion and profit shifting (BEPS) project"

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This report surveys and analyzes the reform efforts in international corporate taxation under the base erosion and profit shifting (BEPS) project, initiated by the OECD in 2012 and endorsed by G20 leaders in 2013, with participation from non-OECD G20 and some developing countries. While the main outputs were released in October 2015, key aspects remain ongoing, inviting all states to join the Inclusive Forum on BEPS. The report begins by outlining the historical legal and institutional frameworks for international corporate tax coordination, tracing back to the League of Nations in the 1920s. It highlights the interplay between political concerns regarding multinational enterprises (MNEs) and the work of technical experts, particularly since G7 involvement in the mid-1990s and the subsequent G20 engagement post-financial crisis. The analysis identifies flaws in international tax rules that have led to issues of double non-taxation and tax avoidance, resulting in 'stateless income.' Key sections succinctly explain the measures proposed in the BEPS reports and assess their potential impact on addressing BEPS issues. The report also discusses implementation challenges and the ongoing agenda, concluding with an evaluation of global tax governance challenges and the roles of various stakeholders in addressing them.