The BEPS Proposals and Alternatives
Here we provide a Briefing, which analyses the outcomes of the latest phase of the G20/OECD project on base erosion and profit shifting (BEPS), and outlines options and alternatives, especially for developing countries.
We show the limitations of the BEPS project measures, and their unsuitability for developing countries. Such countries should take action to adopt measures in response, especially to the global minimum tax (the GloBE), implementation of which is under way. The GloBE itself is unfair and ineffective for most developing countries, but its implementation could put a brake on the race to cut corporate tax rates. It provides an opportunity for developing countries to (i) review and phase out inappropriate tax incentives, and (ii) introduce stronger measures to protect the source tax base, which can be designed to be compatible with the GloBE.