Tax Base Erosion and International Tax Optimization: Theoretical Perspectives and Implications for Morocco

Abstract

International tax base erosion has become one of the most pressing challenges for public finance in a globalized economy characterized by the increasing mobility of capital and profits. Multinational enterprises exploit gaps and mismatches between tax systems to artificially reduce their tax liabilities, leading to substantial revenue losses for governments and creating distortions in tax fairness and competition. These practices disproportionately affect emerging economies such as Morocco, where reliance on tax revenues remains high.

This paper adopts a theoretical approach based on a critical review of the literature on international tax base erosion and the OECD’s Base Erosion and Profit Shifting (BEPS) project. It analyzes the main mechanisms of artificial profit shifting, including abusive transfer pricing, excessive intragroup debt financing, relocation of intangible assets, and the use of tax havens. The study also assesses the main international initiatives that have been implemented (BEPS project, global minimum tax, EU directives, UN approach) and examines their adaptation in the Moroccan context.

The main contribution of this paper lies in the proposal of an analytical typology of anti-BEPS instruments, specifically tailored to the institutional and administrative specificities of developing economies. Findings highlight that the effectiveness of these reforms largely depends on the capacity of domestic tax administrations to implement them. The Moroccan case illustrates both the progress achieved in terms of reform and the persistent challenges arising from structural and organizational constraints.

Keywords: Tax base erosion, international taxation, transfer pricing, BEPS, Morocco.

Classification JEL: H 26

Paper type: Theoretical Research