Breaking down BEPS: Strategies, Reforms, and Planning Responses Note


Michael V. Sala

Document Type



In response to a call from the G20 to address perceived aggressive international tax planning strategies, the Organization for Economic Co-operation and Development initiated its Base Erosion and Profit Shifting project in 2012. The project's flagship document provided a broad outline of the path to reform current international tax norms and highlighted several specifically disfavored tactics. This Note unpacks these tactics at a fundamental level to reveal the confluence of international and U.S. tax law that supports them. Examples include withholding tax exemptions, residency law mismatches, exceptions to U.S. anti-avoidance rules, and the current U.S. entity-type selection regime. In spite of the project's ambitious goals, early indicators suggest that several of these tactics may survive. Other tactics may be replaced with straightforward workarounds or unutilized local-country preferential regimes.

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