To what extent does profit shifting shape international tax policies, and is the OECD’s BEPS initiative an effective and equitable global response?
- Multinational enterprises (MNEs) shift over USD 1 trillion in profits annually to low-tax jurisdictions, causing global tax revenue losses exceeding USD 200 billion (Tørsløv et al., 2023). In response, the OECD introduced the Base Erosion and Profit Shifting (BEPS) initiative, including the Two-Pillar solution, which aims to reallocate taxing rights and enforce a 15% global minimum tax (GMT). This study evaluates BEPS’s effectiveness, combining macroeconomic data, firm-level analysis, and case studies like the Double Irish Dutch Sandwich. Findings reveal that while BEPS improves tax transparency, it lacks strong enforcement, disproportionately benefits developed nations, and fails to eliminate tax havens. Although BEPS is a step toward tax fairness, it remains inadequate in preventing aggressive tax planning. Stronger global cooperation, potentially under a UN-led framework, may be necessary to curb profit shifting effectively.
| Author: | Meriam Maroua Mennani |
|---|---|
| Advisor: | Marc Peter Radke |
| Document Type: | Bachelor Thesis |
| Language: | English |
| Year of Completion: | 2025 |
| Granting Institution: | Hochschule Furtwangen |
| Release Date: | 2025/02/21 |
| Tag: | BEPS; Base Erosion; Multinational enterprises; Profit shifting |
| Page Number: | 51 |
| Degree Program: | IBM - International Business Management |
| Functional area: | Economics |
| Open-Access-Status: | Closed Access |
| Licence (German): |  Urheberrechtlich geschützt |