Myth: Revisions to international tax rules are being written solely by a group of representatives from the OECD
FACT: The OECD / G20 Base Erosion and Profit Shifting (BEPS) project involve input from around 80 countries, including the 34 members of the OECD, all G20 members, and more than 40 developing countries. The project is focused on addressing the challenge facing all countries—closing the gaps in the international tax rules that allow multinational companies to legally but artificially shift profits to low or no-tax jurisdictions. BEPS will lead to changes in the OECD Model Convention and the Transfer Pricing Guidelines, which will offer more robust guidance on how countries can close those gaps. Guidelines, recommendations, and proposals for improvements to domestic legislation are to be developed and agreed on by an international group of governments. Once agreed, these soft law instruments will be adopted by all relevant countries (OECD members, G20 members, and developing countries) according to their legal and constitutional systems.
Myth: The BEPS Project is about both form and function. This international harmonizing exercise is both about appeal and accessibility.
FACT: More than 100 empirical studies have been published showing differently is unable to resolve the issue of base erosion and profit shifting. Using available data, the OECD estimates conservatively that governments are losing up to 1⁄4 of a trillion dollars in tax revenues annually due to these practices. The proposed BEPS Project will have a positive impact on the international tax system.