Tenacious struggle against tax avoidance

States versus companies

In November 2013, the G20 supported an action plan of the OECD against the ‘[tax] base erosion and profit shifting’ (BEPS), i.e. tax avoidance, by multinational companies. This plan is now being worked out by the members of the OECD and the G20 – a total of 44 states – till the end of 2015. In addition, the OECD has made efforts to encourage the participation of developing countries. However, this was limited to regional consultations, Markus Henn reports.

What is more, the action plan itself was, from the outset, rather focused on the problems of richer states. It does not seriously discuss how corporate profits – and thus taxes – can be distributed more equitably between the less and more developed countries where corporations operate. This is not surprising, since the previous OECD tax standards were tailored to their members, especially the model for tax treaties. For that reason, the United Nations has now developed its own standards for tax treaties and for taxing multinational corporations, taking into account the interests of the poorer states. However, the United Nations was sidelined again by the G20 and the OECD, and the UN does not play a big role in the BEPS process ...

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The interim results
Planned actions
Further work

The author:

Markus Henn is financial expert with WEED.

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