Base Erosion and Profit Shifting Exploration of Tax Differences and Tax Economics

Abstract

Multinational companies transfer profits to countries with low tax rates via tax planning. In response to the request from G20 nations, the OECD launched a total of 15 BEPS (Base Erosion and Profit Shifting) actions, hoping to prompt the reform in tax systems in different countries. This paper conducts a case study in the examination of taxation differences created by multinational companies by leveraging various tax rates in different countries. Expert interviews are conducted to examine the adjustments and responses of tax planning and investment structures in the corporate world in the wake of the amendments to CFC and PEM tax codes, as well as the correlation between tax revenues and economies. Finally, this paper presents suggestions so that taxes and profits are operated in a fair and efficient environment. This will benefit economic developments and promote effective resources utilization.