G20 agree tax information exchange

The G20 group of leaders have signalled their commitment to automatic tax information exchange to improve transparency, and called on the OECD to draw up a new global standard by February 2014 report Harris & Co chartered accountants Northampton who specialise in accountancy services for small businesses.

At their latest summit last week, the G20 gave their backing to the OECD’s action plan on base erosion and profit shifting (BEPS) which was presented to G20 finance ministers at July’s Moscow meeting.

The G20 called on member countries to take action to tackle the ways in which international tax rules allow multinationals enterprises to reduce overall taxes paid by artificially shifting profits to low-tax jurisdictions. They want all countries to join the Multilateral Convention on Mutual Administrative Assistance in Tax Matters.

The joint communique issued after the summit said the G20 would began the exchange of information between themselves by the end of 2015, once the OECD has delivered the new standard. The group is also asking the OECD to develop a roadmap setting out how developing countries can participate in automatic information exchange.

Chancellor George Osborne said:

‘Earlier this year the UK government put a fairer tax system at the heart of the agenda when David Cameron chaired the G8 summit. This week’s agreement shows the G20 leaders adopting this agenda and making it their own and that is a huge milestone on the road to making the international tax rules fairer.’

BDO partner Fiona Fernie said:

‘This is a major breakthrough and representative of the way that the tide is turning against tax evasion. In the past few years we’ve seen so many developments in the fight against tax evasion: offshore disclosure agreements, partial amnesties and now automatic information exchange agreements, this would have been unheard of five years ago.’