The OECD’s Inclusive Framework on base erosion and profit shifting (BEPS), which includes over 125 countries, is debating four proposals for corporate tax reform, to update the global tax system to the digitalizing economy. Over 2000 pages of public comments have been filed with the OECD and livestreamed, public meetings were recently held in Paris. The “first pillar” of options require significant reforms to legal rules to allocate more taxable profits to market countries, irrespective of corporate physical presence. The debate is interesting, but these negotiations were born out of public outrage regarding fairness—the sense that the pie of corporate profits is not divided equitably between shareholders and governments, or between nations. It’s the financial (and administrative) implications that we need to talk about.
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