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The Organization for Economic Cooperation and Development today unveiled its first proposals for changing corporate tax rules as part of an international effort to crack down on tax avoidance by multinationals.
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“The G20 has identified base erosion and profit shifting [BEPS] as a serious risk to tax revenues, sovereignty and fair tax systems worldwide,” OECD Secretary-General Angel Gurria said in a statement.
“Our recommendations constitute the building blocks for an internationally agreed and coordinated response to corporate tax planning strategies that exploit the gaps and loopholes of the current system to artificially shift profits to locations where they are subject to more favorable tax treatment,” he added.
The BEPS project has been tasked with formulating a 15-point “action plan” by 2015. In unveiling the first seven components Tuesday, the OECD said improved transfer pricing documentation and a standard country-by-country reporting form for multinationals would enhance transparency for tax administrations and increase certainty and predictability for taxpayers.
The reporting form would disclose the activity, employment level, profits and tax paid in each country in which a company does business. The data would only be available to tax authorities, not to the general public.
Source: OECD proposes major changes to Irish and international corporate tax rules
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