Costing governments an estimated 100-240 billion USD in lost corporate income tax revenues per year, tackling it effectively is a global issue, requiring a coherent global approach. For the first time ever in international tax matters, OECD and G20 countries have worked together to develop a project to equip governments with domestic and international instruments needed to tackle tax avoidance. At the request of G20 Leaders in 2015, the OECD established the G20/OECD the "Inclusive Framework on Base Erosion and Profit Shifting" (BEPS), now covering over 130 members representing a wide diversity of economic profiles, including a significant number of developing countries. All of the members participate on an equal footing. They are committed to implementing the BEPS measures, to undertake peer reviews concerning the BEPS minimum standards, and to finalise the remaining standard-setting work, in particular in relation to transfer pricing.
If and when this agreement is implemented it will reign in the long standing activities of major companies engaged in the shifting of profits to low tax jurisdictions which was first made public in 2012 by a report into Starbucks by Tom Bergin a journalist working for Reuters and the author of a recent book on Economics entitled "Free Lunch Thinking" . However, not surprisingly there is not yet 100% agreement from all of the countries concerned and there have been many criticisms that the agreement does not go far enough.
In order to provide a more detailed understanding of the OECD/G20 agreement dated 1st July 2021 please download this document in pdf which sets out the main framework of the agreement: