amounts of money through theirvarious businesses and may choose to reinvest into new or
existing businesses.The American MNEs are personiﬁcations of capitalism.
What if these MNEs were too artful in their greediness? What if these MNEs exploited
the weak points of complicated tax codes with artful tax avoidance schemes? What if the
MNEs succeeded ingaining an unfair advantage over other honest local businessesby using
loopholes in the tax codes to increase proﬁts? Do any of these questions impact caffeine
seeking customer’schoice –Starbucks or Marylou’s?
Google, Apple, Microsoft, Facebook, Amazon, Starbucks: They are outstanding MNEs.
However, for some tax specialists, they are emblematic of international tax avoidance
schemes. Though policy makers and the tax specialists look at those MNEs with awe for
their cleverness,they have also been aware of their devious practicesfor a long time.
History shows that the tax policy makers play a cat-and-mouse game with the MNEs:
MNEs exploiting a vulnerable part of tax codes, the tax policy makers repairing loopholes
and MNE exploiting another vulnerable part of new revised tax codes. TheMNEs have not
committed a crime such as tax evasion as much as they have committed actions in a gray
zone, which is generally called as tax avoidance. Some may argue MNEs have not
committed illegal actions –rather, morally illegal actions. Through tax avoidance, MNEs
shift tax burdens to the rest of taxpayers and harm the fairnessof tax codes. Policy makers
need to address tax avoidance. Many policy makers have long struggled with the problem
and have dreamed of transformingthe current laws.
An ambitious challenge on international taxation is in the hands of policy makers,
namely, the Base Erosion and Proﬁt Shifting (BEPS) Project recently initiated by the
Organization for Economic Cooperation and Development (OECD). By the OECD, BEPS
refers to “tax planningstrategies that exploit gaps and mismatches in tax rules to artiﬁcially
shift proﬁts to low or no-tax locations where there is little or no economic activity”(OECD,
2018a). The policy makers recently initiating the battle against international tax avoidance
scheme at the OECD have been developing a comprehensive project in 2016 against BEPS,
the so-called BEPS Project, at an unprecedentedly rapid pace. The BEPS Project is so
inclusive: the OECD involvesas many as 87 member countries in the BEPS Project, as of the
end of October 2016 (OECD,2017).
This paper suggests that momentum was spurred by a scandalous and innovative
international tax avoidance scheme in 2012. This paper will analyze this argument and
identify the important factors needed to build momentum for the next phased reform of
international taxation following the BEPS Project. The hypothesis of this paper is that the
key factors for building momentumare a country having a government willing to embrace
the cause of reform, unfairnessfelt toward entities using tax avoidance schemes which other
comparable entities could not be use, grass-rootspressure for the reform, effective places to
negotiate cooperation amongmajor countries for the reform, solid cooperation among many
countries in the worldto implement standards, and rhetoric of slogan with less opposition.
Richard Eccleston identiﬁed following four factors for the reform of international
taxation through analysis of history: “the support of great powers,”“a robust compliance
regime,”“prevailing norms,”and “the demands of domestic political circumstances”
(Eccleston, 2012, Chapter 3 Politics without Conviction: The OECD’s Failed Harmful Tax
Competition Initiative).According to Richard Eccleston, “the support of great powers”refers
to a setting where all of powerful countries should concert the cooperation of reform of
international taxation; “a robust compliance regime”refers to power which force every
country to follow standards for the reformof the international taxation; “prevailing norms”
refers to a dominating theory which would sound supportive to the reform of international
taxation; “the demands of domestic politicalcircumstances”refers to support for the reform