OECD Action Plan in Base Erosion and Profit Shifting in Taxation and the Situation of Turkey

OECD Action Plan in Base Erosion and Profit Shifting in Taxation and the Situation of Turkey

Elvan Cenikli (T. C. Muğla Sıtkı Koçman University, Turkey)
Copyright: © 2019 |Pages: 15
DOI: 10.4018/978-1-5225-7564-1.ch007
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The BEPS Action Plan, which was prepared by OECD upon the call of G20 countries in order to overcome this problem, was announced on 19 July 2013, and it was approved in the G20 Leader's Summit that was held in Saint Petersburg in September 2013. This chapter discusses the mentioned action plan and the probable effects of this plan to Turkey. In this respect, evaluation of the mentioned action plan will be made from the Turkey perspective by focusing on the most important actions of the OECD Action Plan that it put forward for ensuring the international tax equity.
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Major Problems In Beps Action Plan, Solution Suggestions And The Situation Of Turkey

The 15-point BEPS Action Plan, which is an important example of global tax policy, focuses on certain global tax issues. The taxation of the digital economy, harmonization of hybrid financial instruments, strengthening of the rules of foreign controlled corporations' profits, prevention of base erosion through interest discount, making the transparency and the principle of substance over form a taxation principle, the prevention of abuse of double taxation agreements, prevention of avoiding from status of being a permanent establishment through artificial ways, ensuring compliance with transfer pricing rules and providing international coordination in fighting with BEPS and to develop joint mechanisms are the major issues that BEPS Action Plan has focused on.

Taxation of Digital Economy in Struggle With BEPS

To tax digital companies, an international standard and the cooperation of countries are required to tax the digital companies. The most important organization in this regard is the OECD and its initiatives are supported by the G20. The difficulties caused by the digital economy in implementing the existing international rules have been addressed in the action plan titled “Taxation of the Digital Economy”, Action Plan No. 1. First of all, there are some proposals for the determination of these difficulties with a comprehensive approach and by taking into consideration both direct and indirect taxation and the development of proposals for important solutions (Birinci and Eser, 2017: 453). In the BEPS Action Plan, the following three important issues are discussed in the taxation of electronic commerce and digital economy (Bicer, 2018; Ferhatoğlu, 2018: 223).

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