Erosion Base Y Cambio De Beneficios

Chapter 1

Introduction

Globalisation has benefited our domestic economies. Globalisation is

not new, but the pace of integration of national economies and markets has

increased substantially in recent years. The free movement of capital and

labour, the shift of manufacturing bases from high-cost to low-cost locations,

the gradual removal of trade barriers, technological and telecommunication

developments, and the ever-increasing importance of managing risks and

of developing, protecting and exploiting intellectual property, have had an

important impact on the way cross-border activities take place. Globalisation

has boosted trade and increased foreign direct investments in many countries.

Hence it supports growth, creates jobs, fosters innovation, and has lifted

millions out of poverty.

Globalisation impacts countries’ corporate income tax regimes. As

long ago as the 1920s, the League of Nations recognised that the interaction

of domestic tax systems can lead to double taxation with adverse effects

on growth and global prosperity. Countries around the world agree on the

need to eliminate double taxation and the need to achieve this on the basis

of agreed international rules that are clear and predictable, giving certainty

to both governments and businesses. International tax law is therefore a key

pillar in supporting the growth of the global economy.

As the economy became more globally integrated, so did corporations.

Multi-national enterprises (MNE) now represent a large proportion of global

GDP. Also, intra-firm trade represents a growing proportion of overall trade.

Globalisation has resulted in a shift from country-specific operating models

to global models based on matrix management organisations and integrated

supply chains that centralise several functions at a regional or global level.

Moreover, the growing importance of the service component of the economy,

and of digital products that often can be delivered over the Internet, has

made it much easier for businesses to locate many productive activities

in geographic locations that are distant from the physical location of their

customers. These developments have been exacerbated by the increasing

ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING – © OECD 2013

8 – 1. INTRODUCTION

sophistication of tax planners in identifying and exploiting the legal arbitrage

opportunities and the boundaries of acceptable tax planning, thus providing

MNEs with more confidence in taking aggressive tax positions.

These developments have opened up opportunities for MNEs to

greatly minimise their tax burden. This has led to a tense situation in which

citizens

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