CLARITY or chaos? Supporters of the Base Erosion and Profit-Shifting (BEPS) project, being worked on by the OECD, argue that it will bind multinationals to a consistent set of global tax rules, providing them with less licence than they now have to short-change governments through artful use of loopholes in national laws. Sceptics worry that it could only lead to chaos if countries adopt the new guidelines to differing degrees, or if some governments conclude they are too soft, and take unilateral action to stop tax revenue on profits being siphoned abroad.
With two months to go before the club of rich and middle-income countries presents its plan to the G20 for approval, much of its detail remains unclear. But no one doubts that, with so many clashing national interests at stake, there are limits to what can be achieved. Discord has been evident lately, even among allies: in June a US Treasury official accused Britain and Australia of undermining international agreement by “going their own way”. One beef is over Britain’s new “diverted profits” tax, which imposes a levy on profits routed to tax havens through “contrived...
from The Economist: Business http://ift.tt/1JA69uq
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