New proposals to tackle tax avoidance by multinational companies such as Amazon and Google were unveiled today by the Organisation for Economic Co-operation and Development.
The Paris-based body said the world’s biggest economies should impose a new “country-by-country” reporting regime on multinational firms to increase the transparency of their corporate activities and limit scope for them to shift profits offshore to avoid tax.
“The country-by-country reporting will provide a clear overview of where profits, sales, employees, and assets are located and where taxes are paid and accrued,” it said.
The OECD also said multinational rules should be devised to ensure compliance with the new regime by governments.
The proposals, which include a curb on firms artificially reducing their profits in a jurisdiction by abuse of “transfer pricing”, will be presented to G20 finance ministers in Australia later this week and go before the full leaders’ meeting in November.
In the UK, internet giants Google and Amazon have been lambasted by MPs for doing large amounts of business here but paying next to no tax on their profits.
Also, in 2012 the coffee chain Starbucks agreed to pay £20 million in corporation tax over two years after being heavily criticised for paying just £8.6 million during the previous 14 years to the British Exchequer.
