Event description
Reflecting the explosion of profit shifting by multinational companies that occurred from the early 1990s, and catalysed by the fiscal pressures that followed the financial crisis that began in 2008, policymakers in high-income countries came to share the longstanding concerns of lower-income countries about the scale of global corporate tax abuse and the failings of the international rules. The G20 group mandated the OECD to lead the ‘Base Erosion and Profit Shifting’ (BEPS) process, initially from 2013-2015. With swift recognition that the problems had not been solved, the continuing discussions about digitalisation gave rise to a ‘BEPS 2.0’ that was intended to run from 2019-2020, but continues to this day.
The current OECD proposals have broken the mould set by the League of Nations a century ago, in including elements of unitary taxation and formulary apportionment (to move beyond the deeply flawed arm’s length pricing), and a form of global minimum tax. But the unitary element would apply to only a tiny fraction of multinationals’ profits, and the minimum tax leaves the incentives for profit shifting in place while delivering most benefits to high-income headquarters countries and profit shifting hubs.
This event will analyse the threats and opportunities that now face countries – from the pressure to sign a blank cheque (to make binding multilateral commitments when the OECD is unable or unwilling to publish estimates of potential revenue impacts), to the potential space to pursue unilateral or regional alternatives exploiting the new recognition, in principle at least, of the value of unitary tax and formulary apportionment.
This event is part of a series of online public events the Tax Justice Network is hosting that will discuss critical opportunities in 2022 to meet pressing global urgencies with global tax progress. The event series will bring together high-level policymakers, leading economists and renowned campaigners to discuss the most pivotal tax justice policy developments of 2022, how tax justice policies can be implemented and who should lead reform of the global tax system. Learn more about Tax Justice Series 2022 here.