CYIL vol. 14 (2023)

CYIL 14 (2023) THE ROLE OF INTERNATIONAL ORGANIZATIONS IN ESTABLISHING THE GLOBAL… various divisions prepare reams of influential data and analyses. Its publications, including those on taxation have proliferated over recent decades to hundreds and even thousands per year. 42 Within the governance architecture, the G20 may build the political consensus, while the OECD proposes the technical action plan. In this way, the G20’s political leadership and the OECD’s technical advantage complement each other, making a leap in global tax governance. 43 2.5 Inclusive Framework on Base Erosion and Profit Shifting Base Erosion and Profit Shifting (BEPS) refers to tax planning strategies that exploit gaps and mismatches in tax rules to artificially shift profits to locations with low or no tax rates and barely lacking to no economic activity, resulting in little or no corporate tax being paid and revenue losses for governments. In 2015, under the OECD/G20 BEPS Project, over 60 countries delivered 15 Actions to tackle tax avoidance, improve the coherence of international tax rules and ensure a more transparent tax environment (BEPS package). 44 In 2016, the OECD and G20 established an Inclusive Framework on BEPS 45 to ensure that all jurisdictions, whether OECD or non-OECD countries, participate in the decision making process. The BEPS Inclusive Framework is a multilateral agreement through which member countries commit to reforming their domestic tax laws and treaties to reflect the standards and policies articulated by the Framework. 46 There are currently 142 members 47 with a commitment to pay an annual membership fee. 48 3.1 OECD Two Pillar Solution While BEPS package may broaden the tax base in some nations, it didn’t address the race to the bottom for low corporate income tax rates. 49 In a historic agreement on 8 October 2021, 136 countries of the Inclusive Framework approved the OECD two-pillar solution 50 and agreed to the OECD proposals on Pillar 1 and Pillar 2. At the G20 Summit in Rome on 30 October 2021, the leaders of the world’s biggest economies endorsed this two-pillar 42 TALLBERG, J., BÄCKSTRAND, K., SCHOLTE, J. A., & SOMMERER, T. (2023). SNS Democracy Council 2023. Global Governance – Fit for Purpose . SNS – the Center for Business and Policy Studies, p. 67. 43 ZHU, J. (2016). G20 Institutional Transition and Global Tax Governance. Pacific review , 29 (3), 465-471. https://doi.org/10.1080/09512748.2016.1154687 p. 465. 44 More detailed information on the specific Actions are available at OECD https://www.oecd.org/tax/beps/beps actions/, accessed on 10.5.2023. 45 OECD. OECD/G20 Inclusive Framework on BEPS. https://www.oecd.org/tax/beps/flyer-inclusive-framework on-beps.pdf. 46 Additional information are available in the OECD Report, OECD. (2021a). Developing Countries and the OECD/G20 Inclusive Framework on BEPS . Available at https://www.oecd.org/tax/beps/developing- countries and-the-oecd-g20-inclusive-framework-on-beps.htm. 47 List of members of the OECD/G20 Inclusive Framework on BEPS available at OECD https://www.oecd.org/ tax/beps/ accessed on 10.5.2023. 48 OECD. OECD/G20 Inclusive Framework on BEPS. https://www.oecd.org/tax/beps/flyer-inclusive-framework on-beps.pdf. 49 PAUL, J. (2017). The Potential Consequences of the Global Tax Reset. Ne. J. Legal Stud. , 36 , 85. p. 94. 50 The final political agreement as set out in the Statement on a Two-Pillar Solution to Address the Tax Challenges Arising from the Digitalisation of the Economy and in the Detailed Implementation Plan, released by the OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (BEPS) on 8 October 2021. 3. Multilateral Cooperation

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