Tax Avoidance

(asked on 29th October 2014) - View Source

Question to the HM Treasury:

To ask Mr Chancellor of the Exchequer, what recent discussions he has had with his EU counterparts about measures to reduce tax avoidance; and if he will make a statement.


Answered by
David Gauke Portrait
David Gauke
This question was answered on 5th November 2014

The UK is at the forefront of multilateral action through the G8, G20, European Union and OECD to tackle this issue of corporate tax avoidance. The UK used its Presidency of the G8 to successfully build international support for this work.

Work is now underway at the OECD, in the form of the Base Erosion and Profit Shifting (BEPS) project. The BEPS project is the most comprehensive reform of the international tax rules with the aim of ensuring that multinational enterprises pay their fair share of tax, in the jurisdictions where their economic activity is located. The project has 44 participant countries, 21 of which are within the EU.

At the UK’s Lough Erne summit in June 2013 the G8 leaders confirmed their support for the ongoing G20/OECD work.

At their September 2013 summit in St Petersburg, the G20 Leaders fully endorsed the ambitious and comprehensive BEPS Action Plan set out over 2014 and 2015.

The first phase of the BEPS project is now complete, with participants reaching agreement on seven reports which have been produced by the OECD and endorsed by G20 Finance Ministers.

The G8 called on the OECD to develop a common template for multinationals to report profit and tax information to tax authorities to help assess risks. This work was included in the BEPS Action Plan (action 13) and was one of seven outputs achieved in 2014.

Subsequently, the UK announced that it would be the first of 44 countries to formally commit to implementing the newly agreed BEPS output of a country-by-country reporting template.

Discussions are ongoing in G20 Finance Minister’s and ECOFIN meetings to ensure that the momentum of the BEPS project is maintained, so that the project is completed successfully and on time.

Further to the BEPS project, international work with G20 and EU counterparts is ongoing with the Automatic Exchange of Information policy.

The UK put tax transparency at the heart of its presidency of the G8, calling for the creation of a new global standard on automatic tax information exchange to tackle offshore tax evasion. The new global standard was developed by the OECD and agreed in July 2014. At the March European Council leaders committed to implement the standard in the EU through agreement of the amended Administrative Co-operation Directive, which they aim to agree by the end of the year.

In total 92 countries and have now committed to implement the new global standard, with the first information exchanged no later than 2018. This includes all EU Member States, all of the UK’s Crown Dependencies and Overseas Territories with a financial centre and the majority of the world’s financial centres. Of these countries and jurisdictions, 51 have already signed an international agreement to implement the standard.

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