Responsible taxation - the impact on Singapore's hub status
As Beps project is still in development stage, it won't be wise for S'pore to take proactive unilateral steps now which would impact on its competitive position.
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INTERNATIONAL taxation and taxation of multinational corporations (MNCs) is a topic that continues to attract growing interest within the business community, specifically the Base Erosion and Profit Shifting (Beps) project being carried out by the Organisation for Economic Co-operation and Development (OECD), which continues to push ahead at a rapid pace with the target completion date of December 2015.
Put simply, Beps refers to instances where the interaction of different international tax rules leads to some part of the profits of MNCs being shifted to locations where there is little physical activity combined with a low tax burden - meaning those profits are taxed at a low rate or, in some situations, not at all.
The reality is that this is rarely illegal, as it is often a matter of differences between the tax rules in different tax jurisdictions and because internationally developed standards have not kept pace with the "globalisation" of the economy and MNC business models.
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