BEPS Plan as the Crucial Point of International Tax Cooperation: Status and Prospectives of Inplementation

Abstract

Problem setting. Tax administration is a complex legal and social institute. And the well-being of the state depends largely on the appropriate tax collection procedure. At the same time, throughout history, taxpayers tried to evade these payments, in particular through aggressive tax planning. This leads to the large loss of state funds. The US loses about USD 135 billion annually. About USD 150 billion were withdrawn from Ukraine for the period from 1991 till now. Due to the use of offshore, our state loses UAH 200-300 billion annually. This is about a third of the budget. These facts are the basis of the practical problems of this study. This article describes the activities of developed states which have decided actively to fight aggressive tax planning through intergovernmental cooperation – one of the main ways to solve the problem, which is the subject of the article. In fact, the practical significance of the subject of research, is that the latest revolutionary changes in tax cooperation that are investigated (the BEPS Plan) remain virtually unexplored in scientific works, given that they are new and are being implemented today.

Article’s main body. The article analyzes the prerequisites and the need to create, the history and development prospects of the BEPS Plan/Project – the OECD/G20 Base Erosion and Profit Shifting Project, explored 15 actions of this plan and the BEPS minimum standard, the author focused on the importance of implementing Action 3 on controlled foreign companies and Action 15 on MLI – Multilateral Convention to Implement Tax Treaty Related Measures to Prevent Base Erosion and Profit Shifting, also investigated the status of the implementation of the BEPS Plan in Ukraine.

Conclusion and prospects for the development. Having studied the BEPS Plan, the author highlighted 2 main steps of the Plan, which can help to solve the described problems in particular in Ukraine. These include, firstly, the amendment of the double taxation treaties, which is achieved by signing the MLI Agreement and proper implementation of the provisions thereof. Another important step is the introduction of rules for controlled foreign companies. In Ukraine a draft law on changes to the Tax Code for this step has already been formed. The rules should oblige taxpayers to declare CFCs and pay a tax thereon, the author emphasizes the importance to adopt the above law. The author considers the further broad perspectives of studying the topic as international cooperation of states in the tax field is beginning to gain momentum. In Ukraine, however, the reforms studied are just beginning to be realized, therefore, there is a wide field for research in the future.