BEPS: Hypocrisy and tax protectionism in disguise?

KUDOS to Deputy Prime Minister Lawrence Wong for delivering an extensive and far-reaching Budget. It was not only deeply researched, well thought-out and targeted, but also far-sighted in kickstarting focus on areas that will be of keen importance in years to come. While most of the issues covered are easily digestible to the man on the street, the subject of BEPS is perhaps something that is less familiar to many.

What is BEPS?

The BEPS (Base Erosion and Profit Shifting) project was started in 2013 by the Organisation for Economic Co-operation and Development (OECD) and the G20 to combat increasingly aggressive tax planning by corporations that unfairly eroded tax revenue. This subsequently laid the foundations for 15 action plans, covering areas such as harmful tax practices, treaty abuse and disclosure of aggressive tax planning.

These were legitimate areas of concern that, if left unchecked, would lead to serious tax leakages that would have repercussions on the ability of governments to function effectively.