How good to see someone challenging the current OECD-inspired tax gospel with a comprehensive dissing of the BEPS heresy. The tax boss of the UK’s ACCA must have swallowed hard before accepting the report they had commissioned, but he has bitten the bullet. I’m not going to drown you in statistics, just one will do: Germany’s revenue from corporate income tax was 15 percent higher in 2013 than in 2012. Now how are you (well, I don’t mean you, I mean “they”) going to square that figure with the prevailing consensus, at least among politicians and tax collectors, that MNEs are getting away with blue murder? It’s just a bundle of politically-inspired, or maybe I mean debt-inspired balderdash. Everyone needs to remember at all times that, whatever usefulness it may have had in the past, the OECD is nowadays simply and only a rich-country pressure group whose goal is the destruction of tax competition.
The whole BEPS farrago is giving a lot of innocent amusement to governments, accountants, journalists and legislators; but in terms of adding to the wealth of nations, it is a waste of space. In fact it is counter-productive, because it distracts attention from the need to develop a coherent set of principles to apply to transfer pricing. Pending the abolition of coporation tax, which as my regular readers will know is both desirable and inevitable, there is an existential need to apportion income between corporate locations on a basis which will be accepted as fair, and the OECD has indeed done some moderately useful work in this regard when it sticks to its knitting. I wonder indeed if there is not a dichotomy within the OECD between the sensible economists who are trying to craft reasonable international agreements, and a more militant tendency which represents in a loose sense the regiment of barking, cash-strapped finance ministers of the Western world?