15/03/2024
Base erosion and profit shifting (BEPS)
represents a critical challenge in the field of taxation, particularly in the context of international commerce. BEPS occurs when multinational corporations exploit gaps and mismatches in tax rules to artificially reduce their tax liabilities by shifting profits from high-tax jurisdictions to low-tax or no-tax jurisdictions, often where little economic activity occurs. This practice erodes the tax base of the countries where the actual economic activity takes place, leading to significant revenue losses for governments and undermining the fairness and effectiveness of the tax system. BEPS strategies involve complex financial arrangements and legal structures, allowing companies to exploit loopholes while remaining compliant with existing laws. Consequently, BEPS has become a focal point for policymakers, tax authorities, and international organizations, sparking efforts to develop coordinated measures to address these challenges and strengthen global tax transparency and fairness.
