Corporate tax dodgers in sights

TOM PULLAR-STRECKER
Last updated 05:00 19/02/2013

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Finance Ministers from the G20 meeting in Moscow have backed a drive by the Organisation for Economic Co-operation and Development to stamp out tax avoidance by multinationals.

The BBC reported the G20 agreed to set up three committees to consider changes to tax law, including one jointly chaired by France and the United States that will look at how to identify the correct tax jurisdiction for business activities, particularly e-commerce.

An OECD report published last week said corporate income tax, which contributes 10 per cent of the total tax take within the OECD, was under threat from multinational tax avoidance.

French Finance Minister Pierre Moscovici told the BBC that France was "strongly determined to fight against tax fraud, tax avoidance, and tax evasion".

"We must avoid situations in which some companies use international and domestic law to be taxed nowhere."

New Zealand Revenue Minister Peter Dunne backed the OECD project in December, in the wake of media reports that highlighted very low rates of tax paid by Google and Facebook. He said international co-operation meant "the days of large multinationals escaping taxation will be numbered".

The BBC identified Amazon, Google, Starbucks and Facebook as among companies whose tax structures were under the spotlight.

A Google spokesman responded last week that the company "was aware of the discussion within the OECD and happy to contribute as appropriate".

The G20 ministers said in their Moscow communique that they looked forward to being presented with a "comprehensive action plan" in July.

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- BusinessDay.co.nz

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