Brussels, 19/07/2013 (Agence Europe) - On Friday 19 July, the Organisation for Economic Cooperation and Development (OECD) submitted an action plan on erosion of the tax basis and the transfer of profits overseas to the G20 finance summit, which will continue in Moscow until Saturday evening.
The plan outlines 15 key actions to help governments tackle creative accountancy by multinationals shifting money around in order to avoid paying tax. The action plan is backed by the United Kingdom, France, Germany, Russia and other countries and aims to introduce over time international rules on the taxation of multinationals to fill the current legal loopholes that enable companies to take advantage of the globalised digital economy and avoid tax. Companies like Google, Starbucks and Amazon avoid tax, often totally, by taking advantage of legal loopholes.
The suggested measures aim to make countries' tax systems coherent, remove loopholes in tax agreements that lead to double non-taxation and introduce greater transparency into corporate tax returns. On the first point, it is recommended that national laws be changed and the OECD's tax conventions for the digital age be introduced, which will lay down by September 2014 exactly what “digital presence” is and the profits made from digital presence. In order to tackle double non-taxation, the plan calls for closer international cooperation and stricter rules on the cost of transfers, that allow multinationals to transfer profits to subsidiaries in countries where they pay little or no tax. In terms of transparency, the plan suggests forcing multinationals to make public details of their tax minimisation plan and provide relevant details in a country-by-country breakdown.
The plan will be adopted by the G20 summit in Saint Petersburg on 5 and 6 September, and then gradually introduced by the end of 2015. (FG/transl.fl)