The 'Upgraded' Strategy Against Harmful Tax Practices Under the BEPS Action Plan

The Action Plan on Base Erosion and Profit Shifting (Action Plan) intends to “revamp” the work on harmful tax practices that has been undertaken by the Organisation for Economic Co-operation and Development (OECD) since the late 1990s. Further enhancement of the OECD's transparency standards, the reinforcement of the requirement of a “substantial activity” for any “acceptable” preferential tax regime and an ambition to ensure a closer engagement of non-OECD economies re-open the debate on “harmful tax competition” that sparked in the academic literature and political arenas following the first attempt of international co-ordination. This article discusses the priority measures that are envisaged by Action 5 of the Action Plan and their foreseeable prospects. It demonstrates that the OECD is merely seeking to upgrade its existing mandate and exploit the political momentum that has been created by the BEPS campaign. The proposed strategy aims to adjust the current methods and structures rather than offer a conceptual rethinking