Document claims that US corporate tax system is broken, and labels BEPS initiative as “costly and ineffective”
THE OECD’S Base Erosion and Profit Shifting (BEPS) initiative is weakening national sovereignty, according to a report from the United States.
Entitled The OECD’s Conquest of the United States: Understanding the Costs and Consequences of the BEPS Project and Tax Harmonization, the report was created by the Mercatus Centre, part of George Mason University.
It claims that the BEPS initiative favours “consolidated, uniform, and transparent tax rules”, but risks sacrificing compliance, diminishing taxpayer rights and weakening institutional diversity.
The research centre labels the OECD’s attempt at consolidating international tax rules as “costly and ultimately ineffective”
“Ultimately, there may be no solution to the problem that the OECD has identified through the BEPS Project,” the report states.
“International corporate income, dispersed among numerous jurisdictions, each with different economic and cultural values, will likely never be uniformly taxed under any regime.
“The BEPS Project will ultimately be a cosmetic remedy to the fundamentally flawed system of corporate taxation,” continued the report, which recommended that US corporate tax should be scrapped as it double-taxes hard workers and penalises multinationals that wish to reinvest earnings in the United States.
In January, 31 countries signed the OECD’s Multilateral Competent Authority Agreement (MCAA), which enables the sharing of country-by-country reports, an agreement which was seen by many as a major step forward towards the implementation of BEPS.