G20 to crack down on tax avoidance

A set of 15 action points have been developed by the Organisation for Economic Co-operation and Development in its final report to crack down on company tax avoidance.

The Organisation for Economic Co-operation and Development (OECD) has released its final report looking into base erosion and profit sharing (Beps) with the aim of creating a single set of tax rules to crack down on tax avoidance.

The rules would address company tax avoidance where businesses move profits to low tax jurisdictions to avoid paying a higher amount.

The final report contains 15 actions that have already been discussed by G20 finance ministers and will now go on to be discussed by G20 leaders at the annual summit in November 2015. The actions centre around three main areas: coherence of international tax rules, reinforcement of economic substance and the increase of transparency and certainty.

A summary created by the tax team at Hong Kong-based law firm King & Wood Mallesons highlights the following points from the report: the OECD and G20 will continue working together on Beps until 2020, and some of the actions will be implemented very quickly. Several measures will require national lawmakers to implement them, though some countries have already done so, whereas others will only need to be applied by local tax authorities.

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