G20 in joint efforts to shut international loopholes
Bad news for multinational corporations may be on the horizon.
New rules from the Organisation for Economic Co-operation and Development could mean that online giants such as Amazon and Google will be forced to disclose where their profits were made, and where their taxes were paid.
This could lead to the many loopholes in tax laws being closed, and ensure that the correct levels of corporation tax are paid in each territory that a firm operates in.
The OCED is trying to create a unified approach to the problem – by unveiling its plans at a G20 summit in Australia this weekend. It wants nations to work together, rather than to try and tackle the issue of tax avoidance separately.
But accountants warn this could raise costs for customers, as dozens of major companies would face more bureaucracy and red tape when declaring their financial results.
For governments, the impact of lost tax revenue can be huge. The US believes it is missing out on £430 billion in income, because of how companies use off-shore financial accounts to shield assets.
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