What is the base erosion and profit shifting (BEPS) initiative?
The base erosion and profit shifting (BEPS) initiative is an international tax avoidance strategy developed by the Organisation for Economic Co-operation and Development (OECD) and the G20 countries. The BEPS initiative aims to prevent multinational companies from shifting profits away from the countries where the income was generated. It does this by introducing new rules and standards that target international tax avoidance methods used by companies. In particular, the BEPS initiative focuses on areas such as transfer pricing, digitalization, permanent establishment, and controlled foreign companies (CFCs). Through the BEPS initiative, countries are able to enforce rules and regulations that limit companies from avoiding their taxes. In the US, including in the state of Florida, these strategies help make sure all companies are paying their fair share of taxes. The BEPS initiative also requires companies to produce country-by-country reports that outline their tax activities. These reports help countries make informed decisions about how to best manage their taxes and prevent companies from avoiding them. For example, in the US, the Tax Cuts and Jobs Act of 2017 amended the BEPS initiative to require companies to report both domestic and international tax activities. In short, the BEPS initiative is an international tax avoidance strategy developed by the OECD and G20 countries that helps ensure companies are paying their fair share of taxes. It does this by introducing new rules and standards that target international tax avoidance methods used by companies. This helps countries like the US, including Florida, make informed decisions about how to best manage their taxes and prevent companies from avoiding them.
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