If you are moving or trading goods across borders, this topic should be of primary importance from both a Transfer Pricing and Customs perspective. There is potential for you to have Transfer Pricing and Customs exposures in your supply and value chains as a result of the OECD/G20 initiative on Base Erosion and Profit Shifting (BEPS).
BEPS is targeted at 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.
BEPS is a significant issue for many jurisdictions regardless of their reliance on corporate income tax. By the end of 2015, tax jurisdictions will have the tools to ensure that profits are taxed where economic activities generating the profits are performed and where value is created, while at the same time give businesses greater certainty by reducing disputes over the application of international tax rules by standardising requirements. The deliverables consists of fifteen specific Action steps which will be released over a two year period which began in 2014.
