UPDATE: Global push to act on tax avoidance has wide support   16 Nov 2014

UPDATE: Global push to act on tax avoidance has broad support, English says

(Adds comment from Fletcher Building's Adamson starting in sixth paragraph.)

By Tina Morrison

Nov. 16 (BusinessDesk) - There is broad global support for moves to curb international tax avoidance, New Zealand Finance Minister Bill English said on the sidelines of the G20 Leaders' Summit in Brisbane.

Cracking down on tax avoidance is one of the key agenda items at this weekend's G20 Summit, where New Zealand is an invited guest. The G20 countries make up 85 percent of global economic activity and 75 percent of global trade.

"Of all the multilateral initiatives, the one to do with the international taxation of corporations and individuals has made more progress than most and that’s because it has got such broad political support," English told reporters at the Brisbane Convention & Exhibition Centre where the G20 talks are being held. "Both governments and voters want to see particularly the new generation of tech-oriented companies paying their fair share of tax and (also) individuals."

Tech companies including Amazon, Microsoft, Google and Apple have been criticized for booking profits in low-tax jurisdictions, while countries such as Luxembourg have come under fire for acting as a tax shelter for large corporations. European Commission president Jean-Claude Juncker has been fending off criticism at this weekend's summit over his role as the former Luxembourg prime minister in turning the country into a tax haven.

"It has become pretty much unacceptable in the developed world at least to be running a tax haven that undermines other people's tax bases," English said, referring to the controversy around Luxembourg.

Fletcher Building chief executive Mark Adamson, who is representing New Zealand on the sidelines of the G20 meeting as part of the B20 business group, said he expected a breakthrough on tax, following talks with Australian Treasurer Joe Hockey and Prime Minister Tony Abbott on Friday night.

"They were quite hopeful that the base erosion, as they call it, would be resolved by in principal taxing earnings where they are accrued rather than multinationals moving them around the world for tax advantage," Adamson told reporters in Brisbane. "I think there’s going to be a breakthrough this weekend."

New Zealand expects to be part of an international plan to combat tax avoidance being developed by the OECD, English said. The first steps to implementing the plan would be in 2016/17, he said.

"There is a lot of technical work going on by the OECD right now," English said. "It will be an ongoing effort because it’s an area where a lot of the devil is in the detail. Multinational initiatives usually struggle to get momentum, this one is really moving along even though it’s quite a difficult area."

English said tax payments needed to be transparent.

"If a company is present in New Zealand, we want to be able to understand whether and where they are paying tax elsewhere, so I think the transparency is the first step."

(BusinessDesk)

Add a comment