Wednesday, November 12, 2014 9:18 am
Australian Prime Minister Tony Abbott on Wednesday said leaders of the world’s most powerful economies should use this weekend’s G20 summit to close corporate tax loopholes that cost countries billions of dollars in revenue.
Abbott, the Group of 20 host, said there was a “collective self interest” in member nations preventing companies from shifting profits from one country to another in order to minimise their tax bills.
Otherwise, he warned, the burden on individuals and companies that met their full tax obligations would continue to rise.
“This is a problem for every jurisdiction, certainly for every G20 jurisdiction, because inevitably businesses want to minimise their tax,” he told the Australian Financial Review ahead of a G20 leaders’ meeting in Brisbane this weekend.
“What we want is a commitment across the G20 that companies should pay tax in the jurisdictions in which they make their profits.”
The conservative leader said there was nothing inherently wrong in minimising taxes “but we want to make sure the way countries conduct themselves does not facilitate that”.
Multinational firms, including digital giants such as Apple and Google, have been accused by countries of using tax strategies that minimise their payments.
OECD chief Angel Gurria told a meeting of G20 finance ministers in September that a probe into tax avoidance had already identified 37 billion euros (US$46 billion) from voluntary disclosure programmes involving 24 countries.
Abbott will push G20 leaders to endorse a common reporting standard for exchanging tax information, aimed at increasing transparency and addressing corporate avoidance tax strategies, particularly profit shifting.
The fight against fiscal cheats took on added significance last week with revelations that Luxembourg had given huge tax breaks to hundreds of global firms.