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that period , to maximize the benefits to all . These plans should include two key focal points :
early actions could also threaten to undermine the basic principles already set out in the announcements so far , even if directionally consistent with the BEPS project . This could create more uncertainty , greater risk and an erosion of trust between tax authorities and taxpayers . Each unilateral change also increases the risk of double taxation and the risk that there will need to be an “ unpicking ” when the final recommendations are delivered .
One way to address this is for governments to commit to reviewing their recent changes and to “ align ” once the final outcomes are known . Again , this is a process that needs the input of business .
Planning for implementation
Following the finalization of the BEPS project next year , the focus is likely to shift to the countries themselves . There is an opportunity now to plan for
■ Greater investment into tax administration : The focus on the international tax regime is going to result in more situations where countries initially disagree with how profits are allocated crossborder . From a business perspective , it will be important that these disagreements be resolved quickly , so that focus can remain on the business rather than dealing with disagreements between governments . To this extent , the BEPS project needs to be followed with greater investment in resources for tax administrations to support the Mutual Agreement Procedure and arbitration .
■ Commitments to consistent implementation : Inconsistent implementation is also a key source of risk . Published plans for implementation will help ensure that changes are clearly communicated .
In conclusion , much effort and hard work has gone into the BEPS project to date . The next stage , however , is the most difficult one , where principles are converted into practical change . In these times , more than ever , we all need to be working closely together if we are to create a better working world for all stakeholders . ■
IMF Managing Director Christine Lagarde with South Africa ' s Finance Minister Nhlanhla Nene at the G20 Finance Ministers and Central Bank Governors meeting in Washington DC
Disclaimer - The views refl ected in this article are the views of the author and do not necessarily refl ect the views of the global EY organization or its member fi rms .