This article evaluates the recently completed Base Erosion and Profit Shifting (BEPS) project of the G20 and OECD and offers some alternatives for reform.

The international tax system is the result of the interaction of different actors who share the responsibility for its integrity. States and multinational corporations both enjoy to a certain extent freedom of choice with regard to their tax behaviour – which entails moral responsibility. Making, interpreting and using tax rules therefore is inevitably a matter of exercising responsibility. Both should abstain from viewing tax laws as a bunch of technical rules to be used as a tool without any intrinsic moral or legal value. States bear primary responsibility for the integrity of the international tax system. They should become more reticent in their use of tax as regulatory instrument – competing with one another for multinationals’ investment. They should also act more responsibly by cooperating to make better rules to prevent aggressive tax planning, which entails a shift in tax payments from very expert taxpayers to other taxpayers. Here, the distributive justice of the tax system and a level playing field should be guaranteed. Multinationals should abstain from putting pressure on states and lobbying for favourable tax rules that disproportionally affect other taxpayers – SMEs and individual taxpayers alike. Multinationals and their tax advisers should avoid irresponsible conduct by not aiming to pay a minimalist amount of (corporate income) taxes – merely staying within the boundaries of the letter of the law. Especially CSR-corporations should assume the responsibility for the integrity of the tax system.

The international tax landscape is changing and it is changing fast. The political perception is that taxation of multinational enterprises is not aligned with the ‘economic activity’ that produces their profits (i.e. not aligned with ‘value creation’). The perception links ‘value creation’ with ‘employees and sales’.
In the BEPS Project of the OECD, the OECD attempts to combat base erosion and profit shifting and to align taxation with value creation. In this article, the authors discuss the impact they expect BEPS to have on tax advisory and tax planning. The focus goes to BEPS Actions 7, 8-10 and 13.
By maintaining the separate entity approach under BEPS for the taxation of multinationals, has the OECD been forced to ‘stretch’ existing rules beyond their limits? Will the created uncertainty lead to a shift from ‘aggressive tax planning’ by multinationals to ‘aggressive tax collection’ by tax administrations? Will the role of tax advisory change from advising on the lowest possible effective tax rate to a broader advice including risk appetite and public expectations?

The aim of this article is to examine the differences in perception of ‘fairness’ between developing and developed countries, which influence developing countries’ willingness to embrace the Base Erosion and Profit Shifting (BEPS) proposals and to recommend as to how to overcome these differences. The article provides an introduction to the background of the OECD’s BEPS initiatives (Action Plan, Low Income Countries Report, Multilateral Framework, Inclusive Framework) and the concerns of developing countries about their ability to implement BEPS (Section 1); a non-exhaustive overview of the shortcomings of the BEPS Project and its Action Plan in respect of developing countries (Section 2); arguments on why developing countries might perceive fairness in relation to corporate income taxes differently from developed countries (Section 3); and recommendations for international organisations, governments and academic researchers on where fairness in respect of developing countries should be more properly addressed (Section 4).

The number of comparative tax law studies is substantial. The available literature on the methodology behind these tax comparisons, however, is rather limited and underdeveloped. This article aims to contribute to the theoretical background of tax comparisons by explicating methodological considerations in a comparative tax research on tax incentives for cross-border donations and relating it to the available methodological literature. Two aspects of tax law make comparative research in tax law a challenging endeavour: its complexity and fast-changing nature. To overcome these issues, this article proposes to divide jurisdictions into a limited number of categories. In this process the different legal levels are analysed systematically, resulting in categories of jurisdictions. Among the jurisdictions in one category, common characteristics are identified. This results in an abstract description of the category. I use the term ‘ideal types’ for these categories. The high level of abstraction in the use of ideal types allows for comparison of tax jurisdictions, without the risk that the comparison gets outdated. An additional advantage of working with ideal types is that the conclusions of the comparison can be applied to all jurisdictions that fit in the ideal type. This increases the generalisability of the conclusions of the comparative tax research.

The author addresses the phenomenon of taxable profit-shifting operations undertaken by multinationals in response to countries competing for corporate tax bases within the European Union. The central question is whether this might be a relic of the past when the European Commission’s proposal for a Council Directive on a Common Consolidated Corporate Tax Base sees the light of day. Or would the EU-wide corporate tax system provide incentives for multinationals to pursue artificial tax base-shifting practices within the EU, potentially invigorating the risk of undue governmental tax competition responses? The author’s tentative answer on the potential for artificial base shifting and undue tax competition is in the affirmative. Today, the issue of harmful tax competition within the EU seems to have been pushed back as a result of the soft law approaches that were initiated in the late 1990s and early 2000s. But things might change if the CCCTB proposal as currently drafted enters into force. There may be a risk that substantial parts of the EU tax base would instantly become mobile as of that day. As the EU Member States at that time seem to have only a single tool available to respond to this – the tax rate – that may perhaps initiate an undesirable race for the EU tax base, at least theoretically.