Base Erosion and Profit Shifting: Options, Opportunities and Alternatives
Dr. James N. Mohs; Martin A. Goldberg J.D, LL.M; David Palacio Buitrago MST

Base erosion and profit shifting is generally defined as tax strategies that serve to exploit gaps or inconsistencies in global tax systems that allow an enterprise to shift profits to lower tax jurisdictions. This can be accomplished by either shifting income to lower tax jurisdiction or shifting deductible expenses to higher tax jurisdictions. Historically, these shifting strategies have been handled on a country by country basis with no centralized framework. In 2015 the Organization of Economic Cooperation and Development proposed modifications through its Base Erosion and Profit Shifting project that if adopted by the member countries, would reverse the adverse impact to the global tax system caused by shifting profits and assets among members of controlled groups. By reviewing the major tax shifting strategies as well as the Organization of Economic Cooperation and Development proposals to curb any perceived abuses, this research will serve to fill a gap in the literature surrounding Base Erosion and Profit Shifting strategies. The conclusions and recommendations reached in the paper are generalizable and appropriate for use in developing best practice solutions.

Full Text: PDF     DOI: 10.15640/ijat.v5n1a2