Base Erosion and Profit Shifting Case Studies to Examine Conflicting Views on Taxation
Journal of Finance and Accounting
Volume 6, Issue 5, September 2018, Pages: 117-126
Received: Oct. 21, 2018;
Accepted: Nov. 6, 2018;
Published: Nov. 30, 2018
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Hsiu-li Wu, Taxation and Accounting Group, College of Business, Feng Chia University, Taichung, Taiwan
Shang-Yung Yen, Graduate Institute of Management of Technology, Feng Chia University, Taichung, Taiwan
Multinational corporations have contributed to the unfair phenomenon of tax base erosion and profit shifting by taxation planning and transferring profits into countries or territories with low tax rates. The OECD, under the push from G20 member countries, launched 15 action plans for BEPS (Base Erosion and Profit Shifting), as an attempt to drive reforms in tax systems across different countries for a just and efficient taxation system. As part of this global initiative, the Taiwanese government is also amending its tax laws for better consistency, substance, transparency and fairness. This paper examines Google, Amazon and Starbucks headquartered in the U.S. and Feng Tay headquartered in Taiwan and analyzes how multinational corporations leverage the difference in tax rates in different countries and the existence of bilateral tax agreements for tax planning and profit shifting. The European Commission holds the view that such practices violate the laws of the European Union. This paper conducts an in-depth analysis on the arguments from both sides and develops suggestions on the basis of tax fairness, moral issues and research findings. It is hoped that taxations and profits travel in a just and efficient environment so that taxation fairness benefits economic developments and effective use of resources.
Base Erosion and Profit Shifting Case Studies to Examine Conflicting Views on Taxation, Journal of Finance and Accounting.
Vol. 6, No. 5,
2018, pp. 117-126.
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