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Friday, October 28, 2016

G20 Receives ‘Action Plan’ To Curb Tax Avoidance

G20 Receives ‘Action Plan’ To Curb Tax Avoidance

MOSCOW (AFP) – The OECD presented G20 nations with a bold strategy on Friday to crack down on tax avoidance by corporate giants and the super rich, and so boost overstretched national budgets.

The G20 group of emerging and advanced nations had asked the Organization for Economic Cooperation and Development (OECD) to come up with the action plan after agreeing earlier this year to focus on tax avoidance.

The OECD said that governments had to improve alignment between their tax regulations to prevent big investors from parking huge sums in tax havens.

The plan was presented at the start of the latest meeting of G20 finance ministers and central bankers in Moscow under the Russian presidency, in the hope it will be agreed in the final communique on Saturday.

“It (the plan) sets forth 15 actions that would result in most fundamental changes in the tax systems since the 1920s,” said OECD Secretary General Angel Gurria.

“We must address this so that multinationals pay their fair share,” he added

The proposal seeks to end the possibility for multinational companies to profit from tax agreements between separate states and ultimately pay very little or zero tax.

The main champions of the plan — Germany, Britain, France and Russia — want it to be adopted by the entire G20 and then implemented in the next two years.

“Some big companies manage to have a three or four-percent tax rate worldwide,” French Finance Minister Pierre Moscovici told a news conference.

“These situations are impossible to explain to our fellow citizens … The plan is a major breakthrough,” he added.

British Chancellor of the Exchequer, George Osborne, said the OECD plan represented “a major step forward” in the battle against tax avoidance.

“The message is clear — people and companies are to pay the taxes that are due,” said Osborne.

There had been doubts about Moscow’s commitment to the issue, given many Russian firms are registered abroad for tax reasons, a practice that was highlighted sharply by the Cyprus crisis.

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