G20 report warns of global tax chaos
Source: Guardian
Governments risk "global tax chaos" as they chase dwindling revenues from multinational companies unless the international tax regime is radically overhauled, according to a report commissioned by the G20 group of nations.
On Thursday the chancellor, George Osborne, will hail a two-year action plan drawn up by the OECD thinktank to clamp down on questionable international corporate tax practices.
The long-awaited report, prepared for a meeting of the G20 finance ministers in Moscow this weekend says "a bold move by policy makers" is necessary to prevent a worsening in the position. The OECD calls it "a turning point in the history of international co-operation on tax".
The report sets out 15 separate actions the international community needs to take to modernise a tax system established in the 1920s. It argues the international tax system is outmoded and unequipped to deal with mobile multinational firms that have found innumerable ways of avoiding tax often by shifting profits to low-tax countries.
Read more: http://www.guardian.co.uk/world/2013/jul/19/g20-report-warns-global-tax-chaos
ctsnowman
(1,903 posts)folks it's those greedy workers and retirees demanding livable income that is forcing us to use austerity to heal the budgets.
Berlum
(7,044 posts)Last edited Fri Jul 19, 2013, 07:20 AM - Edit history (1)
melm00se
(4,994 posts) Requiring online multinationals with extensive warehouse operations in an overseas country, such as Amazon, to pay local tax on any profits arising from sales in that country.
Forcing multinationals to disclose to every tax authority a country-by-country breakdown of profits, sales, tax and other measures of economic activity such as headcount.
Tougher rules to block transfers of high-value and mobile "intangible" assets, such as brands and intellectual property rights, to tax havens where there is little or no associated business activity.
A crackdown on tax regimes found to have too soft an approach to multinationals deploying overseas finance subsidiaries through establishing a new international benchmark for appropriate taxation of controlled foreign companies.
Wider measures to combat predatory tax competition policies emerging in some financially stretched countries, risking a "race to the bottom" climate on tax. The UK's new so-called "patent box" tax break for intellectual property companies will come under scrutiny.
A raft of treaty updates to neutralise the tax advantages of complex financial instruments, schemes and structures, including hybrid capital, interest payment deductions and over-capitalisation.
A requirement on multinationals to disclose the most aggressive "tax planning" structures to the authorities otherwise often relying on limited, local data that does not show the impact of transnational schemes to lower tax.
New mechanisms to fast-track the introduction of OECD recommendations rapidly around the world. And a new approach to measuring the extent to which national tax coffers are being drained by multinationals artificially shifting their profits internationally to lower their tax bills.
http://www.guardian.co.uk/business/2013/jul/19/oecd-g20-tax-reforms-key-points