G20 Backs OECD Anti-Tax Haven Agenda!

Highlights from the Communique adopted by the G20 Finance Ministers and Central Bank Governors at the end of their meeting held today in St. Petersburg Russia:

  • 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.
  • 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.
  • 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.
  • 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.
  • On-line multinationals with extensive warehouse operations in an overseas country, such as Amazon, to be required to pay local tax on any profits arising from sales in that country.
  • Multinationals to be forced to disclose to every tax authority a country-by-country breakdown of profits, sales, tax and other measures of economic activity such as headcount.
  • 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.

It is expected that the full slate of OECD anti-tax haven initiatives will be tabled and adopted by the G20 Heads of Government at their 2013 Summit between September 5-6.

Previous blog posts on OECD Anti-Tax Haven Plans here and here.

Advertisements

14 thoughts on “G20 Backs OECD Anti-Tax Haven Agenda!

    1. Indeed! OECD’s credibility is so shot. They fashioned the rules to suit their own MNCs now that we have 2,000 treaties and counting and more competition by non-OECD members for MNC tax structuring business its a problem that requires a multilateral approach so that there is a level playing field.After more than 5 years they still haven’t reigned in Switzerland.

      Like

  1. I’m not sure what all this means for individuals. If there are to be treaty updates or changes then at least here that means it has to be approved and go through a government process. At any rate as a lowly individual I’m starting to find keeping up with all this tiresome. It’s just draining. That is one of the main reasons U.S. citizens abroad are renouncing too. We have lives and keeping up with what the U.S. plans to do TO all of us is just too time consuming and onerous and ominous. I don’t trust the G20 to actually go after large corporations and leave innocent people alone. Indeed, many of these politicians have their bread buttered by those very corporations they say they are going to “crack down” on. There will be a lot of noise about large corporations and then the final outcome will end up punishing individuals a lot more than any multinational corporation. The G20 does not have a great track record with regard to individual human rights. It shocks me that many organizations like unions, and other liberal orgs are all over this and think it’s a good thing. It’s almost funny. So the protesters have left the streets against the G20 now and are lauding measures taken there and trusting a “good” outcome? A large dose of scepticism is a good thing when talking about multinational world orgs making ANY decisions about the entire world.

    Like

    1. Perfectly understandable! the OECD created and supported the growth and wealth of MNCs including the rules on tax avoidance so now that they have created this business monoliths they want the rest of the world’s help to reign them in. You’re right though if they can’t get the rules to apply to them they will have to resort to individuals through rules related to wealth management, asset protection by attacking trusts. This is also in train.

      Like

  2. You really make it seem so easy with your
    presentation butt I find this topic to be really something that I think I would never
    understand. It seems too complicated and extremely broad for me.

    I’m looking forward for your next post, I will try to get the hang of it!

    Like

    1. Thanks for your feedback. It is a bit complicated but the more familiar you are with the material it gets easier. Thanks again for your interest. Look forward to hearing from you again.

      Like

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s