It is claimed that the BEPS project is a global initiative, built on a worldwide consensus of OECD and G20 members, and other key economies. That’s true to the extent that these countries are regularly heard to pay lip service to the work of the OECD in all its anti-tax avoidance endeavors. But when you look a little closer, there are stark similarities between the OECD’s work and Europe’s vision of what worldwide corporate taxation should look like. Perhaps this is not surprising, as, after all, the OECD and its 2,500-strong team of technocrats, administrators, and academics are based in Paris. Indeed, Pascal Saint-Amans, one of the main supervisors of the BEPS project, is a former French civil servant. And the fact that 25 of the 34 OECD member countries are in Europe will naturally give much of the OECD’s work a European flavor.
Some of the BEPS proposals reflect recent EU tax initiatives, particularly with regards to corporate transparency, VAT on digital services, and harmful tax regimes. This could be the BEPS project’s downfall; some countries don’t like the European high-tax, big government way of doing things. And when Europeans come preaching their brand of social democracy, hackles rise in Washington. True, we’re talking about a Government that foisted FATCA on the world, but there seems little appetite in the current administration for the BEPS project, judging by the comments of Robert Stack, the Treasury’s deputy assistant secretary for international tax affairs, who professed his “extreme disappointment” with the BEPS outputs at the OECD Tax Conference in Washington in June, adding that he was “shocked and appalled” at the attitude of tax administrators and their thirst for more power over taxpayers. Orrin Hatch’s and Paul Ryan’s recent comments on BEPS would seem there’ll be even less appetite for the OECD’s BEPS recommendations if a Republican President joins the GOP majority in Congress from 2017.