Corporate tax avoidance deal signed by 31 nations
Legislation to stop companies using complicated tax arrangements to avoid paying corporate tax has been agreed by 31 members of the Organisation for Economic Co-operation and development (OECD).
This move follows a swell of public anger at the tax practices of some multinationals and these subsequent rules will make it harder for businesses to hide money in tax havens or play one country’s tax authority against another. Companies will have to tell the country in which they operate what they make in that jurisdiction and how much tax they pay. The agreement came about after negotiations during a meeting of the G20 in 2015 and as a result, high-profile firms such as Google, Amazon and Facebook are now obliged to pay tax in the country where the profits are made.
France and the UK are among the 31 nations who have signed the agreement, which focusses on businesses to share information rather than a new law or tax. The Secretary-General of the OECD, Angel Gurria, said that the agreement would have “immediate impact” and boost international cooperation on tax issues, by enhancing the transparency of multinational enterprises’ operations.
However, Google’s deal to pay £130 million to the UK’s HM Revenue & Customs (HMRC) in back taxes for the past decade has been widely criticised for not paying its fair share of corporation tax. This is likely to be a story we will see again…
– 2015-2016 Summary of tax rates, reliefs and allowances
– HMRC target wealthy to reduce tax avoidance