“Financial Times” On Tax Avoidance Crackdown
The ability of multinational corporations to exploit cracks in the international tax system has ignited intense anger around the world and now the spotlight has fallen not just on the companies involved but also on the countries accused of facilitating avoidance, the “Financial Times” reported on Sunday [Apr. 28].
The leading international business news publication cited Google’s use of Ireland and the Netherlands to shift billions of dollars of earnings to Bermuda — resulting in an overseas tax rate of just five per cent last year — as a prime example.
“Against this backdrop of aggressive avoidance and competition, the Paris-based Organisation for Economic Co-operation and Development [OECD], which aims to promote growth, has warned that a failure to collaborate risks a ‘race to the bottom’ on corporate tax,” said the publication in a report headlined “Nations on defensive as anger grows over tax avoidance.”
The report continued: “Moving profits to lower tax countries is estimated to cost governments tens of billions of dollars in revenue a year, according to the European Commission. What is at stake is no less than ‘the integrity of the corporate income tax’, an OECD report said.
“… A 20-year long period of stability in corporate tax revenues could be coming to an end as a result of falling tax rates, said Jeffrey Owens of the Institute for Austrian and International Tax Law. ‘We have reached a tipping point’, he says.”
The “Financial Times” said governments which help multinationals lower their tax burden — including Switzerland, Portugal, Singapore, the Netherlands and Ireland — are “on the defensive.”
With the G20 pledging to crackdown on multinational tax avoidance, Irish Finance Minister Michael Noonan recently told that country’s parliament: “We are a respectable, tax compliant country with a transparent arrangement,” saying reform would require changes in US laws which allow for corporations to shift their profits to low-tax jurisdictions.
“Paris-based Organisation for Economic Co-operation and Development”
That wonderful organisation, the Paris based employees of which pay no tax in France…..
Hypocrisy much????
That’s some good news.