Rule makers or rule takers? : examining developing countries’ participation in the OECD/G20 inclusive framework on base erosion and profit shifting

Abstract

The OECD/G20 Inclusive Framework on Base Erosion and Profit Shifting (Inclusive Framework on BEPS) is one of the leading initiatives to combat tax avoidance and evasion. Although the Inclusive Framework emphasizes that all members of the Inclusive Framework participate on an ‘equal footing’, the Inclusive Framework has received criticism for not sufficiently incorporating developing countries and their interests into the framework. This study wished to examine the criticisms of the Inclusive Framework, and the role of developing countries within the Inclusive Framework. By looking at existing literature on negotiations and the Inclusive Framework and conducting interviews with five experts on international tax and development, the project suggests seven limitations that might particularly affect the role of developing countries under the work of the Inclusive Framework. These seven limitations can be categorized into three different categories of limitations, namely: formal and procedural limitations; institutional aspects; and limitations beyond the OECD and the Inclusive Framework.