The BEPS (Base Erosion and Profit Shifting) initiative has reshaped global transfer pricing regulations, introducing stricter compliance measures to prevent tax avoidance.

Key Points:

1. Key BEPS Actions:

   • BEPS Action 13: Three-tiered documentation (Local File, Master File, CbCR).
   • Focus on aligning profits with value creation.

2. Common Risks in a Post-BEPS World:

   • Profit shifting scrutiny in low-tax jurisdictions.
   • Increased audit frequency and penalties for non-compliance.

3. Mitigating Risks:

   • Conduct regular reviews of intercompany transactions.
   • Update documentation to align with BEPS requirements.
   • Optimize value chains to reflect economic substance.

Staying compliant in a post-BEPS world requires proactive strategies and defensible documentation.