Nowadays, in globalized world businesses use any tool in competition in international economies and markets. One of such tools is aggressive tax planning strategy. This has put a strain on the international tax framework to improve international tax co-operation between governments to counter international tax avoidance and evasion. In 2015 encouraged by the G20, the Organisation for Economic Co-operation and Development (OECD) developed an Action Plan of “base erosion and profit shifting” (BEPS). The Action Plan includes new or reinforced international standards, as well as concrete measures to help countries tackle BEPS. This aim of this paper is to evaluate, how the BEPS project will affect the business environment in Latvia. The objectives of this paper are to analyse Action Plan of BEPS and main recommendations, as well as estimate, how the Action Plan impacts the current situation in Latvia. The method of this research is based on expert survey and desk research, as well as on discussions with tax consultants from the biggest tax consulting enterprises in Latvia. As a result authors conclude that Latvia does not have an implementation plan of BEPS yet, but as an EU Member State and OECD candidate country Latvia must assess its current laws and regulations. The Action Plan mainly affects transfer pricing documentation and country-by-country reporting, permanent establishment status and hybrid instruments. For business environment in Latvia, the Action Plan is going to improve tax administration for multinational enterprises, reduce the distortion of competition, but it is not clear how it will be implemented in Latvia. Keywords