BEPS, which is short for “Base Erosion and Profit Shifting”, is a global initiative to tackle tax avoidance by multinationals. What started as an initiative to counter tax avoidance has morphed into a reshaping of the international tax landscape – everything from the way profits are allocated between countries to new documentation, reporting, and disclosure obligations. BEPS can affect fundamental aspects of your business – from financing, to trading models, to the cost of repatriating profits cross-border.
Many aspects of the OECD’s 15-point Action Plan have moved from the discussion stage to implementation. As a result, it’s critical that you identify which of the 15 actions may affect your business and determine how you will respond. Our international tax team can help you get started by conducting a BEPS Impact Review.
In carrying out a BEPS Impact Review, we apply a systematic approach to assessing the effect of each BEPS Action on your business. This methodology enables us to diagnose the problems and prioritise areas of remedial action. As part of the review, we provide a risk matrix that rates your tax risks from each BEPS action. If changes are needed, we can help you build a global project plan. And, because we take a hands-on approach, we work through the implementation stages with you in every country where change may be required.
Because economic substance is central to BEPS, we have developed ESTaR – an innovative methodology for understanding risks around substance. ESTaR gives us a clear understanding of your value chain and business model, using a methodology based on templates that allow us to keep the discussion accessible and focused. ESTaR is tailored to your business and gives you an understanding of the economic substance risks in your business model.
BEPS is a huge topic with tax rules changing in different countries over different time frames. But, BDO can help you make sense of it. Our integrated network of tax professionals in 162 countries and territories has deep understanding of the rules and, because we meet regularly to share knowledge and best practices, we bring the knowledge of the global network to all engagements.