Brussels, 05/09/2013 (Agence Europe) - Ahead of the summit of G20 leaders in St Petersburg on 5 and 6 September, the OECD was keen to give the battle against tax evasion pride of place and urged the world's leaders to make automatic exchange of bank information among tax offices the general norm and to tighten requirements on multinationals to prevent them from wriggling out of tax by shopping around among various tax systems and taking advantage of tax loopholes.
The scandals revealed by Offshore Leaks showed that the commitments made by the G20 in 2009 have made a difference, but not enough of a difference, said Pascal Saint-Amans, head of tax issues at the OECD. He is confident that the G20 leaders will be able to issue quite a strong statement against tax evasion to illustrate their unity and determination. He said that the OECD might get the support of the political body with the most de facto power in the world (the G20) on two questions: - setting up an international standard for the automatic exchange of tax information among tax offices in different countries (the EU has taken a clear position in this direction and China recently signed a convention on mutual aid in tax matters, which could be used to set up the automatic exchange of tax information, see EUROPE 10908); - and preventing erosion of the tax base by multinationals.
On the first point, however, he said that the G20 leaders would probably not yet commit to a detailed timeline, telling AFP that a deadline would not be set, although they might commit to making speedy progress.
On the second point, the G20 leaders are becoming increasingly aware that multinationals and other companies are not paying their way in the world, particularly at a time when ordinary people are seeing their taxes rising. If multinational standards are not laid down to adjust bilateral treaties and national tax systems that are losing cash through changes in the economy (the digital economy and capital shifting around the world at the touch of a button), then the problem will only get worse and this will be particularly severe for developing countries, which are worse-equipped for dealing with it. The OECD action plan of fifteen key measures for tackling erosion of the tax basis and the transfer of profits overseas to lower taxed countries is a fundamental tool in this connection that is winning growing support. OECD secretary general Angel Gurria explained this in an interview, announcing tat the G20 on Friday would confirm the OECD's mandate to prepare over the next two years a document that will enable all countries to update their company tax legislation and requirements. He said that they would not all introduce the same rates of taxation, but all would apply good practices, known by all, and the document would provide tools for avoiding having to renegotiate tax agreements around the world. Meanwhile, the Netherlands has taken a stand and on the fringes of the G20, has already offered to renegotiate its bilateral tax treaties with nearly twenty-five developing countries to close up loopholes. (FG/transl.fl)