The Organisation for Economic Co-operation and Development (OECD) delivered a new global standard yesterday to crack down on tax evasion with more than 40 countries committing to the measures.
OECD chief Angel Gurria called it “a real game-changer” that would boost international co-operation to reel in cheats. “Globalisation of the world’s financial system has made it increasingly simple for people to make, hold and manage investments outside their country of residence.”
“This new standard on automatic exchange of information will ramp up international tax co-operation, putting governments back on a more even footing as they seek to protect the integrity of their tax systems and fight tax evasion.”
Offshore tax evasion is a serious problem globally, with vast sums deposited abroad and sheltered from tax collectors in their home countries.
OECD tax director Pascal Saint-Amans said Group of 20 finance ministers, meeting in Sydney, had been working on standardising the rules governing where profits of multinationals should be taxed.
It comes as concern mounts that companies, particularly those in the digital and internet sectors, are able to reduce tax bills by shifting profits around the world to areas where rates are lowest.
International Monetary Fund chief Christine Lagarde said accounting for revenues from global digitised businesses was a “big ongoing problem”.
“The political message is we are closing down all loopholes,” Saint-Amans said. – Sapa-AFP