PwC: OECD project could mark biggest reform of global taxation in lifetime

Published at 14:25 PM on 19 July 2013

Commenting on the OECD's Base Erosion and Profit Shifting (BEPS) action plan, Richard Collier, tax partner at PwC, said:

"This could be the biggest reform of global taxation in a lifetime. The tax system isn't being rewritten from scratch, but the OECD is looking at every aspect that isn't working for today's world. Taken together, the many areas covered, and how they interact, amount to a full scale review.

"The international tax system was designed originally to prevent corporate profits being taxed twice. The OECD's big focus is preventing cases where profits might escape tax or where taxable profits are separated from the location of the valuable activities that generate them. The package of new measures is likely to include tougher tests to assess taxable presence and the substance of business activities in a particular country.

"The BEPS action plan is a movement not an isolated project. The scale of its ambition means change is not going to happen overnight. Change will come from countries adopting domestic rules, changes to international tax treaties and changes to the practical application of existing rules by both tax authorities and businesses.

"It's in everyone's interest to reform the tax system and the BEPS action plan is a welcome step forward. Its success will depend on continued commitment and effort by governments and business. The biggest risk to the BEPS project will be if momentum and buy-in now wanes."

Ends


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