According to the UK All Party Parliamentary Group on Responsible Tax (APPG), which was formed on September 14, last year; and is headed by Labour MP, Dame Margaret Hodge,
” the OECD’s action plan for tackling base erosion and profit shifting (BEPS) has fallen short of creating the fair global system needed to combat global tax avoidance because of a lack of transparency.”
According to the APPG, the new rules add to an already complicated tax system which means that corporations, aided by an army of advisors, banks, and lawyers, can exploit these rules to avoid paying tax where value is genuinely created. In their view, this could further undermine public trust in the tax system.”
Accepting that the OECD’s work has been useful in building consensus around the issues of tax avoidance, the APPG expressed concern that the OECD agenda, which is based on at least 15 pillars of reform could ” bring new and greater complexities to the international tax system that could lead to the emergence of new loopholes“.
Citing the fact that national tax authourities are already struggling with digitisation and globalisation the APPG has called for a fundamental review of how companies are taxed.
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