World leaders threw their weight behind a set of tax reforms for multinational corporations during a meeting in Turkey this week, endorsing the Organization for Economic Cooperation and Development’s Base Erosion and Profit Shifting, or BEPS, action plan.

The OECD finalized the plan last month in an effort to discourage corporations from shifting their profits to low-tax countries using tax strategies such as transfer pricing (see OECD Proposal Could Curb Tax Loopholes Favored by Google, Apple).

“To reach a globally fair and modern international tax system, we endorse the package of measures developed under the ambitious G20/OECD Base Erosion and Profit Shifting (BEPS) project,” said the G20 leaders' declaration. “Widespread and consistent implementation will be critical in the effectiveness of the project, in particular as regards the exchange of information on cross-border tax rulings. We, therefore, strongly urge the timely implementation of the project and encourage all countries and jurisdictions, including developing ones, to participate.”

To monitor the implementation of the BEPS project globally, the G20 called on the OECD to develop a framework by early next year involving interested non-G20 countries and jurisdictions that commit to implement the BEPS project, including developing economies, on an equal footing. The G20 also welcomed the efforts by the International Monetary Fund, the OECD, the United Nations and the World Bank Group to provide technical assistance to developing economies in tackling the mobilization challenges they face, including from BEPS.

“We acknowledge that interested non-G20 developing countries’ timing of implementation may differ from other countries and expect the OECD and other international organizations to ensure that their circumstances are appropriately addressed in the framework,” the G20 added. “We are progressing towards enhancing the transparency of our tax systems and we reaffirm our previous commitments to information exchange on-request as well as to automatic exchange of information by 2017 or end-2018. We invite other jurisdictions to join us. We support the efforts for strengthening developing economies’ engagement in the international tax agenda.”

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