G20 endorses OECD tax avoidance timetable
The latest G20 leaders’ summit in Australia, which ended yesterday, has endorsed the various strands of international tax work being undertaken by the European Commission and by OECD, including work on the Base Erosion Profit Shifting (BEPS) project
Prime Minister David Cameron said there had been ‘important breakthroughs’ in making sure that that big companies pay the taxes that they owe, with ‘real progress’ on cooperation between different tax authorities to have greater transparency over tax.
‘There are now over 92 different countries and tax authorities properly sharing information and, as the OECD set out at this G20 meeting, the action we’ve already taken has resulted in $37bn of extra tax being paid by big companies,’ Cameron said.
The final communique issued as the meeting this weekend closed stated: ‘We welcome the significant progress on the G20/OECD Base Erosion and Profit Shifting (BEPS) Action Plan to modernise international tax rules. We are committed to finalising this work in 2015, including transparency of taxpayer-specific rulings found to constitute harmful tax practices. We welcome progress being made on taxation of patent boxes.’
The statement also endorsed the use global Common Reporting Standard for the automatic exchange of tax information (AEOI) on a reciprocal basis to address cross border tax evasion.
It said: ‘We will begin to exchange information automatically with each other and with other countries by 2017 or end-2018, subject to completing necessary legislative procedures. We welcome financial centres’ commitments to do the same and call on all to join us.’
The G20 also said it welcomed the deeper engagement of developing countries in the BEPS project, and pledged to work with them to build their tax administration capacity and implement AEOI.
A separate statement set out the agreed high level principles covering beneficial ownership transparency, saying that the G20 is committed to leading by example in implementing these agreed principles, which are designed to ensure ensuring that beneficial ownership information is accessible to their tax authorities and can be exchanged with relevant international counterparts in a timely and effective manner.
The statement said: ‘As a next step, each G20 country commits to take concrete action and to share in writing steps to be taken to implement these principles and improve the effectiveness of our legal, regulatory and institutional frameworks with respect to beneficial ownership transparency.’
A communique issued by G20 finance ministers and central bank governors underlined their strong commitment to ‘a global response to cross-border tax avoidance and evasion’ and their determination to finalise all BEPS action items in 2015.
The finance minsters’ communique said: ‘We endorse the finalised global Common Reporting Standard for automatic exchange of tax information on a reciprocal basis which will provide a step-change in our ability to tackle and deter cross-border tax evasion. We will begin exchanging information automatically between each other and with other countries by 2017 or end-2018, subject to the completion of necessary legislative procedures. We call on all financial centres to make this commitment by the time of the Global Forum meeting in Berlin, to be reported at the Brisbane Summit, and support efforts to monitor global implementation of the new global standard.’
The communique also stated: ‘We will continue to take practical steps to assist developing countries preserve and grow their revenue bases and stand ready to help those that wish to participate in automatic information exchange. We are deepening developing country engagement in tackling BEPS issues and ensuring that their concerns are addressed’
