The OECD report on Addressing Base Erosion and Profit Shifting 43 showed that the roots of BEPS were not to be found in single rules or provisions, but rather in the interplay of various national tax rules. It also showed that the corporate tax rules and international standards had not kept pace with the changing environment, and identified a lack of information and data availability.
In September 2013, the G20 Leaders endorsed the OECD Action Plan on Base Erosion and Profit Shifting 44 , which was made up of 15 actions. This marked the start of a two-year work to deliver on the Action Plan. The process allowed for the involvement of a large number of countries and a variety of stakeholders. All OECD and G20 countries, including a vast majority of Member States, worked together. Even more countries 45 were associated to the process through their direct involvement in technical groups 46 . Regional structured dialogues were also organised which means that in total more than 90 countries have contributed to the works on the BEPS project. The European Commission was also associated. For all 15 actions, discussion drafts and working documents were made public. There have been more than 1,400 submissions from industry, advisers, NGOs and academics. In addition, 11 public consultations were held with stakeholders. The BEPS Final Reports were published in October 2015 and endorsed by G20 leaders in November 2015. Most Member States, in their capacity as OECD members, have therefore engaged to implement the outcome of the Final Reports.
The final package proposes to reforming key areas of the system to ensure that taxes are paid where economic activity takes place. A first set of measures focuses on improving the coherence of the international tax framework. Examples are the taxation of CFCs, limits on interest deductibility or conditions on the application of preferential tax regimes for intellectual property ('patent boxes'). A second set of measures aims at enhancing transparency, for example by requiring multinationals to provide country breakdowns of key items relevant for taxation ('country-by-country reporting') or by exchanging information on a range of rulings. The third set of measures aims at strengthening substance requirements for example in the area of transfer pricing rules.
Below, the actions that are most relevant to this policy initiative are presented, followed by an overview of the remaining BEPS actions that are mostly catered for by ongoing or existing initiatives at EU level.
