BASE EROSION, PROFIT SHIFTING (BEPS) AND TAX REVENUE: ANALYSIS IN SOUTHEAST ASIAN COUNTRIES

This paper analyzes the impact  of base erosion and profit shifting (BEPS)on tax revenue in Southeast Asian countries for the period of 2012-2017. ASEAN countries are mostly developing countries with  little experience dealing with the aggressive tax strategies of multinational corporations (MNEs). Accordingly, measuring the impact of BEPS on tax revenue in Southeast Asian countries is essential and urgent. Specifically, this paper measures BEPS by offshore index using the Offshore Investment Matrix approach proposed by UNCTAD (2015). According to this approach, 3.6% of inflow foreign direct investment in six Southeast Asian countries for the period of 2012-2017 originated from tax havens and specialpurpose tax countries. The empirical simulation shows that about $ 2.195 billion of the tax revenue of Southeast Asian countries in2017 is lost because of BEPS.