BEPS has been translated into Turkish as Base erosion and profit shifting. BEPS is a project of OECD (Organization for Economic Co-operation and Development) consisting of 15 separate action plans, that is, actions regarding measures that can be taken on 15 different taxation issues that cause tax erosion. 

BEPS in short; It is a project that fights to prevent multinational companies (MNE – multinational enterprise) from causing tax losses or tax avoidance by taking advantage of the differences in the local tax regulations of the countries.


With the BEPS plan, multinational enterprises’ company information, activities, risks, revenues and assets are collected in a single system. The main purpose of the BEPS plan is to eliminate tax inconsistencies from country to country and prevent companies from shifting their profits from a country with a high corporate tax to a country with a low tax rate, thus preventing money laundering. In this project, the priority of essence, transparency and consistency are at the forefront. The plan is to limit opportunities for international tax avoidance.

In addition to preventing both double taxation and double taxation, the project also prevents countries from affecting the investment potential of other countries by lowering tax rates to attract investment. Significant changes are being made that will affect the organizations of multinational companies that transfer their profits to tax havens.

There are 3 types of reporting obligations within the BEPS action plan.


1.Master File: This is the report that includes the organizational structure of the group, the description of its commercial activities, its intangible assets, intra-group financial transactions and the financial and tax situation of the group.

2. Country Report (Local File): It consists of 3 separate reports.

Transfer Pricing Report: This is the annual transfer pricing report that has been in practice in Turkey since 2007, showing the transactions made by the Group’s Turkish resident enterprise with all related companies. Domestic and international related transactions of taxpayers registered with the Large Taxpayers Tax Office and corporate taxpayers operating in free zones; Other corporate taxpayers are required to prepare an annual transfer pricing report covering only their foreign-related transactions.

Annex 2 transfer pricing form within the scope of the Country Report: “Form Regarding Transfer Pricing, Controlled Foreign Institution and Thin Capital”.

Annex4 transfer pricing form within the scope of the Country Report: Transfer Pricing Form for Transactions with Related Parties.

3.Country Based Reporting (CbCR): 76 countries have signed it so far . http://www.oecd.org/tax/automatic-exchange/about-automatic-exchange/CbC-MCAA-Signatories.pdf   Turkey has not signed yet. Once signed, country-based reporting information can be mutually shared with other country tax administrations within the framework of bilateral and/or multilateral international agreements to which Turkey is a party. The list of countries that are parties to the agreements in question is announced by the Administration.

BEPS Examples

For the OECD’s BEPS movement, the BEPS scandals of the last decade have been a driving force. 

Base erosion is a loss of revenue for states. It is estimated that annual tax revenue losses range from US$100 to US$240 billion (4-10% of global revenues from corporate income tax) due to profits being transferred from country to country around the world.

The largest firms in the world are generally US multinationals, which avoid the high (35%) corporate tax rate in the US. To avoid this, they often set up a company in a country with a lower corporate tax rate. Let’s take a look at BEPS in practice, that is, examples of base erosion that are not very fair;

Double Irish

It is the largest tax avoidance structure in history. Double Irish is a BEPS structure used by US companies in Ireland (Apple, Google and facebook etc). For example, Google was founded in Ireland and its headquarters in Bermuda. While this company of Google was considered Irish according to America, it was Bermudian according to Ireland. Meanwhile, the tax rate in the USA is 35% and in Ireland it is 12.5%. Google clearly stated that the reason for this practice was to ‘take advantage of the low corporate tax rate in Ireland’. However, the income generated by Google could be transferred to Bermuda without being taxed in both the USA and Ireland. It is obvious that there is nothing illegal here, but there is also no fair taxation.

Intangible asset transfer

It is the transfer of intangible assets, such as patents and trademarks, whose value cannot be determined clearly and precisely, or whose determination is difficult and not objective, from a country in a tax haven to a country with a high tax rate that is not in a tax haven. In other words, this is the practice of selling intangible assets and not adding the income to the tax base of the company in the tax haven, while the company in the country with high tax rates can deduct this purchase from the tax base.


SPV (special purpose vehicle) is an emerging debt-based BEPS vehicle. It is preferred to be established in countries with tax advantages. Usually, financiers establish the SPV and the SPV acquires shares of the target company by obtaining debt from these financiers. SPV benefits from the tax shield of the debt it uses and many tax advantages in the legislation. Currently, $10 trillion in global securities have been created through SPVs, which are obscure and use asset-backed securitization (ABS) to create artificial debt structures.