TaxCorporate TaxOECD calls for united front to close international tax loopholes

OECD calls for united front to close international tax loopholes

The economic well-being organisation is launching a new framework to increase the amount of countries participating in its BEPS initiative

OECD calls for united front to close international tax loopholes

THE OECD is set to launch a new plan that aims to get more countries involved in its clampdown on international tax avoidance, proposing a new framework that will bring together nations from outside the G20.

Any countries that join the OECD’s new forum will participate as BEPS associates in an extension of the OECD’s Committee on Fiscal Affairs (CFA), as the OECD looks to continue its battle against widespread multinational tax avoidance.

The proposal for greater global participation for the OECD/G20 BEPS project will be presented to G20 finance ministers at their next meeting on 26-27 February in Shanghai.

As BEPS Associates, they will work on an equal footing with the OECD and G20 members on the remaining standard-setting under the BEPS Project, as well as the review and monitoring of the implementation of the BEPS package.

The OECD estimates that revenue losses from BEPS currently stands at $100-$240bn (£71bn-£171bn) annually, or 4-10% of global corporate income tax (CIT) revenues. Given developing countries’ greater reliance on CIT revenues, the impact of BEPS on these countries is particularly damaging.

“Drawing on the G20’s leadership, countries worldwide are working closer than ever to shut down the loopholes that facilitate tax avoidance,” said OECD Secretary-General Angel Gurría.

“The plan we are presenting today will create the largest and most inclusive forum for discussions and decisions on implementing the BEPS measures and ensuring a stronger and fairer international tax system. It is another strong signal that behaviour which was considered both legal and normal in the past will no longer be accepted.”

Also on the agenda for the OECD is a review of the implementation of the four BEPS minimum standards, including harmful tax practices, tax treaty abuse, country-by-country reporting requirements for transfer pricing and improvements in cross-border tax dispute resolution.

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