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BEPS & TAX AVOIDANCE (Topic 5) - Coggle Diagram
BEPS & TAX AVOIDANCE
(Topic 5)
Relationship bet
PARENT
&
BRANCH
company
they are the same company
BUT BRANCH company is treated as a separate retailer
2 reasons why
LEGALLY they are SEPARATE ENTITIES
FIXED FEE represents an allocation tool
F = 0$
Italian (Parent Company) gets suspicious
solution
INTERNAL LOAN o DEBT SHIFTING
BUT...Tax Atuthorities know this trick :warning:
1 more item...
INTELLECTUAL PROPERTY ROYALTIES
to the Foreign Affiliate
IP Shifting
selling the IP to the Foreign Branch (internally) to save money and not give them to the government in taxes
problem
Transfer Pricing Valuation
solution
Smaller, Yearly Royalty Fee
INSURANCE COMPANY
in a TAX Paradise Country
the payment of the Parent company is considered expense = NO TAX
high risk in Italy in 2026
Professional Actuary providing estimations
(BEPS Action 5)
OECD ACTIONS AGAINST BEPS
BEPS
Strategies used by kultinational companies to lower their taxes by exploiting GAPS and GLITCHES in international tax rules (Problem) :red_flag:
Base Erosion
Profit Shifting
OECD Actions
= solution :check:
Cluster 1: Digital & Fundamental Rules
Action 1
Action 15
Cluster 2: Corporate Tax Coherence
Action 2
Action 3
Action 4
Action 5
Cluster 3: Substance & Transfer Pricing
Action 6
Action 7
Action 8 - 10
Cluster 4: Transparency & Certainty
Action 11
Action 12
Action13
Action 14
BEPS Philosophy
Pre-BEPS
Form over Substance
Secrecy
Race to the Bottom
2026 Reality
Substance over Form
Transparency
Global Floor