The Secretary General of the OECD, Angel Gurria. / EFE
The times that multinationals pay less tax than employees seem to have an expiration date. The Organization for Economic Cooperation and Development (OECD), composed of the 34 most developed countries of the world, in coalition with the G20, issued on Tuesday the first set of recommendations to combat abusive tax practices of multinational and limit tax competition between countries. The document presented Tuesday collects the first seven recommendations of the action plan against the “erosion of the tax base and benefit transfer” (known as BEPS, its acronym in English).
The companies have to report their turnover by country
The main innovations of the report highlights the recommendation for companies to the tax authorities detailing the origin of your business by countries to prevent tax avoidance. The OECD proposal, contained in BEPS plan, is that companies report to Treasury figures of turnover, profits, taxes and assets you have in each country. This way, you can make a better analysis of transfer pricing (the transfer of benefits from a country with tax benefits).
A year ago, member countries of the OECD and the G20 met in St. Petersburg where BEPS approved the plan, which contains 15 measures to combat tax multinational engineering and limit tax competition among countries. They did so at a time when Europe championed fiscal consolidation policies (tax hikes and spending cuts) to balance their public finances. While European governments squeezed to find tax revenue figures, the majors took advantage of loopholes in international tax system to avoid paying taxes. Multinationals such as Apple, Microsoft, Google, Amazon and other large companies were served engineering strategies to reduce your tax bill with the IRS.
The project by the OECD and the G20 had driven a defined schedule: seven measures in 2014 and the rest would be presented in 2015 to develop the project to complete by the end of next year. Now, the OECD presents the first set of steps that must be endorsed by the countries in the G20 meeting this weekend held in Cairns (Australia). “With this plan we hope to change the rules of the game”, said Tuesday Pascal Saint-Amans, director of tax affairs of the institution during a meeting with reporters.
A year ago, these international bodies they claimed to “countries to review their national tax laws to ensure that international and national tax rules do not allow or encourage multinational companies to reduce overall taxes by artificially changing gains jurisdictions with low taxation.”
The Action Plan adopted by 44 countries-the OECD, the G20 and other countries candidatos– “aims to ensure that profits are taxed where economic activities that generate profits are made and where creates value “
The number of countries participating in the project BEPS have now published a first series of seven recommendations contained in the Plan of Action planned for 2014 These are:. Final reports on the fiscal challenges of the digital economy, recommended to neutralize the effects of the imbalances caused by hybrid mechanisms prevent abuse of the international treaty agreement, ensuring that results in transfer pricing are in line with the creation of intangible value, ensure greater transparency tax administrations and better consistency of the requirements for taxpayers by improving the transfer pricing documentation, combat harmful tax practices, taking into account transparency and substance development of a multilateral instrument as a means by which jurisdictions for implementing the measures developed in the BEPS and as a result, modify the network of bilateral double taxation treaties.
The countries have insisted on limiting uncertainty and provide a sound fiscal framework and just for businesses ., and investors to BEPS does not affect the economic growth
The Secretary General of the OECD, Angel Gurria, said during the presentation of the report: “The G-20 has identified erosion problems the tax base and displacement benefit (BEPS) as a serious risk to revenue, sovereignty and fair tax systems worldwide. Our recommendations are the building blocks for an agreed and coordinated planning strategies corporate tax that exploit gaps and loopholes in the current system to artificially change benefits to places where they are subject to more favorable tax treatment “international response.
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