In October the OECD’s Base Erosion and Profit Shifting (BEPS) project released a report outlining its progress on a series of steps it was taking to combat tactics—often legal but ethically questionable—used by many multinational companies to reduce or eliminate tax liabilities across their operations. 

“BEPS is about what most people think of as legal tax avoidance,” says Reuven Avi-Yonah, law professor at the University of Michigan. Companies accomplish this by exploiting loopholes in various countries’ tax laws. 

The BEPS project is intended to help countries change their laws to minimize the potential for tax loopholes. As the OECD points out, many BEPS strategies take advantage of the interaction between tax laws in different countries. As a result, unilateral action by one country usually won’t deal with the problems. 

The BEPS Action Plan, launched in 2013, identified 15 steps to help countries address deficiencies in their current tax systems. The measures are being developed with input from representatives from the OECD, governments, businesses, trade unions, academics and others. 

The 2014 deliverables included reports on the digital economy and harmful tax practices, as well as draft rules on treaty abuse and the transfer pricing of intangibles. In releasing the report, OECD secretary-general Angel Gurría said, “Our recommendations constitute the building blocks for an internationally agreed and coordinated response to corporate tax-planning strategies that exploit the gaps and loopholes of the current system.”

Among the BEPS’s action steps scheduled for 2015 are developing recommendations in the design of effective controlled-foreign-company rules and enhancing dispute resolution mechanisms among tax administrations.

As the BEPS project moves forward, finance professionals will want to monitor its progress and build a central knowledge base of tax strategies a company uses, says Dan Neidle, UK-based partner with Clifford Chance. However, he advises holding off on any major changes. “You could incur a lot of costs, then find BEPS never happens or is changed.”

While it’s impossible to predict when and how BEPS may be implemented across the globe, it’s not the only initiative under way to counter companies’ tax avoidance strategies. A case in point: In December, the United Kingdom announced it would impose a diverted profits tax, also known as the “Google tax,” on multinational companies that use complex business structures to shift profits from the UK.