About 40 countries will crack down on tax avoidance by multinational companies from 2017 under a global plan, the Organization for Economic Cooperation and Development said.
Nations are committed to tackling “aggressive practices which erode the tax base and artificially shift corporate profits to low or no-tax jurisdictions,” OECD Secretary-General Angel Gurria told reporters today at a meeting of Group of 20 finance ministers and central bank governors in Cairns, Australia.
The OECD and G-20 economies are working on plans for a global exchange of information to stop tax-avoidance strategies used by companies such as Google Inc., Apple Inc. and Yahoo! Inc. The new standards will see countries automatically share
information gathered from their financial institutions and ensure international coherence of corporate income tax.
“We need to have global information and global action to go after tax cheats,” Australian Treasurer Joe Hockey, who is hosting the Cairns meeting, said today, adding Australia would legislate to implement the global standards by 2017.
Multinational companies hold an estimated $2 trillion in low tax jurisdictions, Gurria said.
The OECD today released its first recommendations to combat tax avoidance by multinationals under its joint Base Erosion and Profit Shifting project with the G-20.
The plan, to be presented to the G-20 for final approval next year, seeks to create a single set of international tax rules, allow governments to protect their tax bases and avoid restrictions on legitimate cross-border activity, Gurria said.
“2014 marks an important year for the future of the international tax system,” he said. “We’ve collectively laid the groundwork for a step change in how it works but implementation will be key.”
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