BEPS: A new era in international taxation

Following The Organisation for Economic Co-operation and Development’s (OECD’s) unveiling of their recommendations to tackle Base Erosion and Profit Shifting (BEPS), will we see a radical overhaul of international taxation?

International tax rules need to be restructured to fit the modern world, which was the goal of the Action Plans. However, it may take time before clear guidelines on acceptable tax planning emerge, so businesses must understand potential risks and justify their decisions. The immediate priority is to assess how current tax arrangements will be viewed under increased transparency and evaluate comfort with this. The reporting rules are designed in such a way that even businesses with relatively straightforward tax affairs may find themselves under scrutiny. Understanding these risks is crucial for businesses to navigate the evolving landscape effectively.

There may also be some opportunities. In particular, the new rules are likely to create a more even playing field over tax strategy and cost. Greater international harmonisation would in turn mean fewer cross-border issues to contend with.

Here are the latest developments and how they could impact you.