Base erosion and profit shifting

About the Inclusive Framework on BEPS


 Background | BEPS PackageMonitoring & Reviewing | Membership 
Steering GroupInvitees & Countries of Relevance | Other Organisations

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The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) brings together over 125 countries and jurisdictions to collaborate on the implementation of the BEPS Package.


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. Although some of the schemes used are illegal, most are not. This undermines the fairness and integrity of tax systems because businesses that operate across borders can use BEPS to gain a competitive advantage over enterprises that operate at a domestic level.  Moreover, when taxpayers see multinational corporations legally avoiding income tax, it undermines voluntary compliance by all taxpayers. 


BEPS is of major significance for developing countries due to their heavy reliance on corporate income tax, particularly from multinational enterprises. Engaging developing countries in the international tax agenda is important to ensure that they receive support to address their specific needs.


Developing countries have been engaged since the beginning of the BEPS Project. Over 80 developing countries and other non-OECD/non-G20 economies discuss the challenges of BEPS through direct participation in the Committee on Fiscal Affairs, regional meetings in partnership with regional tax organisations, and thematic global fora. Many developing countries are now joining the inclusive framework.


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The BEPS package

The BEPS Package provides 15 Actions that equip governments with the domestic and international instruments needed to tackle BEPS. Countries now have the tools to ensure that profits are taxed where economic activities generating the profits are performed and where value is created. These tools also give businesses greater certainty by reducing disputes over the application of international tax rules and standardising compliance requirements.

OECD and G20 countries along with developing countries that participated in the development of the BEPS Package are establishing a modern international tax framework under which profits are taxed where economic activity and value creation occur. Work will be carried out to support all countries interested in implementing and applying the rules in a consistent and coherent manner, particularly those for which capacity building is an important issue.

‌Monitoring, review and standard setting in an inclusive framework

In response to the call of the G20 Leaders, OECD members and G20 countries have developed an Inclusive Framework on BEPS which allows interested countries and jurisdictions to work with OECD and G20 members on developing standards on BEPS related issues and reviewing and monitoring the implementation of the whole BEPS Package.

Monitoring implementation and the impact of the different BEPS measures is a key element of the work ahead. Members of the Inclusive Framework will develop a monitoring process for the four minimum standards as well as put in place the review mechanisms for other elements of the BEPS Package. The monitoring of the four minimum standards will ensure that all members, as well as jurisdictions of relevance, will comply with the standards in order to ensure a level playing field. Monitoring mechanisms are going to be developed in order to monitor jurisdictions’ compliance with their commitments. These mechanisms will ensure the effectiveness of the filing and dissemination of the Country-by-Country reports, as provided for by the review of the Country-by-Country standard by 2020. In regards to review mechanisms, they may differ depending on the Actions and will take into account countries' specific circumstances. All countries and jurisdictions joining the framework will participate in this review process, which allows members to review their own tax systems and to identify and remove elements raising BEPS risks.

Peer review and monitoring process of the four minimum standards:


The Inclusive Framework will also support the development of the toolkits for low-capacity developing countries. The G20 Development Working Group (G20 DWG) has requested the IMF, the OECD, the UN and the WBG to work together on the development of toolkits and guidance to support low-capacity developing countries to address BEPS issues. The toolkits are being prepared to help developing countries implementing measures to tackle BEPS as well as other issues that developing countries have identified as priorities during the regional consultations. The inclusive framework will allow members to feed their views into the toolkit work, and likewise the latter might impact the remaining BEPS standard-setting work. The interaction between international organisations, although independent, will be connected with the inclusive framework. The involvement of the international organisations as Observers in the inclusive framework will facilitate their collaboration. It will offer participants the opportunity to receive coordinated and targeted capacity building support in the implementation of the BEPS outcomes.


Countries and jurisdictions have been invited to express their interest to join this framework as Associates, to participate on equal footing and to commit to implement the comprehensive BEPS Package. Timelines for implementation may differ to reflect the level of development of participating countries.




Steering Group of the Inclusive Framework on BEPS


invitees and countries of relevance

A group of other countries and jurisdictions are participating in the inclusive framework, while they are considering whether or not to commit to the implementation of the BEPS Package. These countries and jurisdictions participate as Invitees.

Countries and jurisdictions of relevance will be identified by the inclusive framework as part of its mentoring process and reviewed. Countries and jurisdictions of relevance are those whose adherence to the minimum standards will be necessary to ensure that a level playing field is achieved. Jurisdictions of relevance will be informed about the minimum standards and invited to commit to the BEPS package and participate in the review process.


Other organisations

International organisations can act as Observers within the inclusive framework. This allows for more coordinated and targeted capacity building in the implementation of the BEPS outcomes. In April 2016, the IMF, OECD, UN and WBG announced in April 2016 the details of their joint effort to intensify their co-operation on tax issues, with the launch of the Platform for Collaboration on Tax. The Platform will facilitate regular discussions between the four international organisations on the design and implementation of standards for international tax matters; it will strengthen their capacity-building support; deliver jointly developed guidance; and share information on operational and knowledge activities.

Regional tax organisations, such as the African Tax Administration Forum, the Centre de rencontres et d'études des administrations fiscales, the Centro Interamericano de Administraciones Tributarias, will continue to play an important role in the BEPS Project. Specifically, regional tax organisations are central to the regional networks, and regional meetings play and important role in the inclusive framework. Regional Networks will be of particular support to developing countries for the implementation of the BEPS Package.


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