Brussels, 09/10/2015 (Agence Europe) -In Lima (Peru) on Friday 9 October, the finance ministers of the 20 largest economies in the world approved the OECD action plan to fight aggressive tax optimisation strategies by multinational companies, on the sidelines of the annual meetings of the IMF and the World Bank (see EUROPE 11403).
This plan, which consists of 15 measures to improve cooperation between states and the transparency of companies in the tax domain, has now been submitted to the heads of state and government of the G20, who will adopt it at the forthcoming summit, to be held in Antalya, Turkey, on 15 and 16 November.
The G20 ministers renewed their commitment for a “rapid, widespread and consistent” implementation of the action plan and called on the OECD to devise a process, no later than in early 2016, to monitor this implementation with precision.
The action plan is based on three fundamental pillars: - introducing coherence in the domestic rules that affect cross-border activities; - reinforcing the substance requirements at international level in order to ensure alignment of taxation of a good or service with the location where that good or service was produced or provided; - increasing transparency, and legal certainty, for businesses and governments (see EUROPE 10892).
The plan brings in minimum standards on the publication of country-by-country reporting only between tax administrations. The debate is underway at EU level on whether this reporting should come in the public domain, as is already required of European banks and companies active in the mining and forestry sectors.
The aim now is to ensure that this action plan is applied by as many countries and jurisdictions as possible. Nearly 90 countries are currently considering a multilateral legal instrument incorporating fiscal measures of the BEPS action plan in the existing network of bilateral treaties. This instrument could be signed by all interested countries in 2016.
It is estimated that the losses in budgetary revenue due to aggressive tax optimisation could be anywhere between $100 and $240 billion. The countries which are hit the hardest by this phenomenon are the developing countries, as their income depends on more tax than is paid to them by major international businesses. (Original version in French by Mathieu Bion)