There are hundreds of empirical studies finding evidence of tax-motivated profit shifting,
using different data sources and estimation strategies. While measuring the scope
of BEPS is challenging given its complexity and existing data limitations, a number
of recent studies suggest that BEPS is responsible for significant global corporate
income tax (CIT) revenue losses. This report assesses currently available data and
concludes that significant limitations severely constrain economic analyses of the
scale and economic impact of BEPS and improved data and methodologies are required.
Noting these data limitations, a dashboard of six BEPS indicators has been constructed,
using different data sources and assessing different BEPS channels. These indicators
provide evidence that BEPS exists and has been increasing over time. New empirical
analysis estimates that the scale of global CIT revenue losses could be between USD
100 and 240 billion annually at 2014 levels. The report also presents a toolkit to
assist countries evaluate the fiscal effects of BEPS countermeasures. The research
also finds significant non-fiscal economic distortions arising from BEPS. The report
concludes by making recommendations regarding data and monitoring tools to improve
the analysis of BEPS in the future.
Base Erosion and Profit Shifting (BEPS) refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to low or no-tax locations where there is little or no economic activity, resulting in little or no overall corporate tax being paid.