Feeds

Worldwide tax crackdown planned against tech globocorps

Overheard in the boardroom: 'Get Musk in here. I need an office on Mars, pronto'

Combat fraud and increase customer satisfaction

The G20 has backed an action plan from the OECD that would fundamentally rejig international rules on taxation.

Major multinationals like Google, Apple and Amazon have excused their legal tax-dodging antics by shrugging their shoulders and telling governments that if they don't like it, they'll have to change the rules, and the OECD agrees.

“International tax rules, many of them dating from the 1920s, ensure that businesses don’t pay taxes in two countries – double taxation," OECD Secretary-General Angel Gurría said. "This is laudable, but unfortunately these rules are now being abused to permit double non-taxation. The Action Plan aims to remedy this, so multinationals also pay their fair share of taxes.”

French finance minister Pierre Moscovici told a news conference on the sidelines of a meeting of G20 finance officials that the plan was "a major breakthrough and is at the heart of the social contract", according to Reuters. Meanwhile the Wall Street Journal reported George Osborne, chancellor of the exchequer in the UK, as saying that he hoped that the G20 countries would back the plan.

"Our job here is to create a set of tax rules that are fair and equipped for the modern economy," he said.

Modern companies, especially globalised online firms, have been able to use the older laws and treaties (designed to stop companies that expand from having to pay tax on the same profits in different countries) to create loopholes through which to move their profits to low or non-existent tax jurisdictions.

The OECD said that its 15-point action plan would close the gaps that allowed income to "disappear" for tax purposes and impose stronger rules that would allow countries to tax profits stashed in offshore subsidiaries.

"Domestic and international tax rules should relate to both income and the economic activity that generates it. Existing tax treaty and transfer pricing rules can, in some cases, facilitate the separation of taxable profits from the value-creating activities that generate them," the OECD said.

"The Action Plan will restore the intended effects of these standards by aligning tax with substance – ensuring that taxable profits cannot be artificially shifted, through the transfer of intangibles (e.g. patents or copyrights), risks or capital away from countries where the value is created."

Following the plan gives the think-tank and the G20 up to two years to come up with specific rules to be adopted internationally.

Gurria said that the OECD was finding the private sector "not only receptive, but cooperative".

The Confederation of British Industry said that it agreed that tax laws were outdated, but the OECD and the G20 needed to ensure that any new laws were adopted by everyone.

"We support the reform of areas of international taxation which can cause confusion about where tax should be allocated and risk multiple or no taxation, but this must be coordinated internationally so UK firms are not disadvantaged," chief policy adviser Katja Hall said. ®

SANS - Survey on application security programs

More from The Register

next story
MtGox chief Karpelès refuses to come to US for g-men's grilling
Bitcoin baron says he needs another lawyer for FinCEN chat
Did a date calculation bug just cost hard-up Co-op Bank £110m?
And just when Brit banking org needs £400m to stay afloat
One year on: diplomatic fail as Chinese APT gangs get back to work
Mandiant says past 12 months shows Beijing won't call off its hackers
Don't let no-hire pact suit witnesses call Steve Jobs a bullyboy, plead Apple and Google
'Irrelevant' character evidence should be excluded – lawyers
EFF: Feds plan to put 52 MILLION FACES into recognition database
System would identify faces as part of biometrics collection
Lavabit loses contempt of court appeal over protecting Snowden, customers
Judges rule complaints about government power are too little, too late
Whoever you vote for, Google gets in
Report uncovers giant octopus squid of lobbying influence
Ex-Tony Blair adviser is new top boss at UK spy-hive GCHQ
Robert Hannigan to replace Sir Iain Lobban in the autumn
Alphadex fires back at British Gas with overcharging allegation
Brit colo outfit says it paid for 347KVA, has been charged for 1940KVA
Jack the RIPA: Blighty cops ignore law, retain innocents' comms data
Prime minister: Nothing to see here, go about your business
prev story

Whitepapers

Designing a defence for mobile apps
In this whitepaper learn the various considerations for defending mobile applications; from the mobile application architecture itself to the myriad testing technologies needed to properly assess mobile applications risk.
3 Big data security analytics techniques
Applying these Big Data security analytics techniques can help you make your business safer by detecting attacks early, before significant damage is done.
Five 3D headsets to be won!
We were so impressed by the Durovis Dive headset we’ve asked the company to give some away to Reg readers.
The benefits of software based PBX
Why you should break free from your proprietary PBX and how to leverage your existing server hardware.
Securing web applications made simple and scalable
In this whitepaper learn how automated security testing can provide a simple and scalable way to protect your web applications.