A core objective of the Base Erosion and Profit Shifting (BEPS) Project was to ensure that profits are taxed where activities generating the profits take place. In this regard, international policy making organisations, such as the OECD and EU Commission, have reinforced the application of certain activity-based concepts, such as substantial activities, core commercial activity, controls over risks, economic reality and substantial economic activities, in soft and hard law instruments. If these concepts were to be consolidated it could be argued that, if the taxpayer were to comply with the relevant economic activities test, as developed in this article, then that taxpayer entity should be: 1. allocated the returns (income) from a transfer pricing perspective; 2. given access to tax treaty benefits in relation to the income it derives; 3. given access to benefits offered by EU law, in particular, the non-application of selected national anti-abuse rules (such as Controlled Foreign Company Rules) and anti-avoidance rules found in the corporate tax directives such as the Parent Subsidiary Directive and the Interest and Royalty Directive as well as the European Anti-Tax Avoidance Directive (for instance, the General Anti-Abuse Rule); and 4. the taxpayer entity should obtain access to economic activity-based preferential regimes. This article supports this proposition by taking into consideration the latest versions of the OECD Transfer Pricing Guidelines, the OECD Commentary, the case law of several courts, in particular the Court of Justice of the European Union, state practices as well as scholarly literature. Essentially, multinational enterprises (MNEs) can continue to engage in profit shifting activities post-BEPS. Furthermore, tax competition intensifies between states to attract economic activities, either through tax incentives or corporate tax rate/withholding tax rate reductions. Moreover, given that the activity-based concepts are subjective, both tax uncertainty and tax disputes will be on the rise. Interestingly, the activity-based concepts do not alter the allocation of the taxing rights framework agreed by states. Nevertheless, in light of the digital debate, there is pressure to reconsider the allocation of the taxing rights framework (Pillar I) and to find solutions to counter genuine profit shifting strategies to low tax jurisdictions/tax competition among states (Pillar II). Thus, the movement from BEPS 1.0 to BEPS 2.0 (Base Expansion and Profit Sharing) is already being witnessed.