MercoPress. South Atlantic News Agency
G20 agrees to fight against international tax evasion by multinational companies
Among companies named are Google, Apple, Amazon and Sawbucks The G20 group of countries has officially supported plans to fight against international tax evasion by multinational companies. In a statement, the G20 countries agreed to exchange tax information and support the Organization for Economic Cooperation and Development (OECD) in its plans to prevent multinational companies from avoiding tax by moving their profits across borders.
These decisions were reached after two days meeting of finance ministers from G20 countries in Moscow, Russia.
According to George Osborne, the United Kingdom Chancellor of the Exchequer, the decisions were necessary in establishing a global tax system that is fair and efficient for the modern economy.
The issue of big international companies avoiding tax has been a sensitive one for a long time. Companies such as Google, Apple, Amazon and Starbucks have perfected the art of using loopholes within tax regulations to avoid being taxed.
Starbucks had to bow to public pressure to pay more tax after questions arose concerning transfer of money to a Dutch sister company.
Google was this year criticized for routing £3.2 billion in UK sales through Dublin thus avoiding taxation.
These firms have argued that they are doing nothing illegal and they have a duty to shareholders to minimize tax payments so as to maximize profits.
The OECD said that some of the existing tax rules created in the 1920s were designed to avoid double taxation of companies operating in more than one country. However, these same rules were being used to create ‘double non-taxation’.
Finance ministers from different countries were urged to fully support the proposed model and exchange tax information without hesitation. Plans were set in place to fully close up the existing loopholes. Tax experts however say this is quite ambitious considering that there are hundreds of tax treaties between countries. All these treaties have to be amended for all the loopholes to be sealed.
Top Comments
Disclaimer & comment rules-
-
-
Read all commentsIt's possible that the G20 could take a lesson out of CFK's book ..
Jul 22nd, 2013 - 10:18 am 0loss of tax revenue caused by companies making their tax declarations in a 'tax-haven' might be arrested by
making a 'best assessment' of the trade volume over the period in their juresdiction,
the tax-take that might be expected to generate
... and the sequestering of company assets up to the calculated amount.
Done year-on-year across the G20, this might focus minds of CEs and shareholders.
Does this classify me as Kirchnerite/Bolivarian, socialist or communist?
It's certainly a non-liberal solution, and anathema to a Conservative, so I doubt that Fido's description of me as a 'neoliberal' will follow me much further ;-)
Europe and the USA do not have the guts to stand up to the multinationals. They'll talk a good talk at these meetings but quickly acquiesce to their corporate masters and allow them to avoid all taxes. They can always hike taxes on the poor anyway, as they always do in those morally bizarre nations.
Jul 22nd, 2013 - 01:50 pm 0At this time of crisis, every state would be wise to tax acording to clear laws over multinationals.
Jul 22nd, 2013 - 03:50 pm 0Commenting for this story is now closed.
If you have a Facebook account, become a fan and comment on our Facebook Page!