The OECD produced this report from the concern of many of it members regarding whether there is fair taxation of the profits of multinational corporations operating in the global market as compared to smaller businesses which operate mainly in domestic market.
On February 12, 2013, the OECD released its report Addressing Base Erosion and Profit Shifting. The report will be reviewed by the G20 at its February summit in Moscow. The 93 page document surveys publicly available data regarding Base Erosion and Profit Shifting and it identifies “pressure points” where it said countries should consider a comprehensive approach to closing loopholes that allow companies to shift profits.
"These include, for example, the balance between source and residence taxation, the tax treatment of intragroup financial transactions, the implication of anti-abuse provisions, including CFC legislation, as well as transfer pricing rules.
A comprehensive approach , globally supported, should draw on the in depth analysis of the interaction of all these pressure points."
This report could lead to an overhaul of certain parts of the OECD's Model Tax Convention on Income and on Capital, which has served as the model for several thousand bilateral tax treaties.
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Read more at: Tax Times blog