A group of Western governments are planning to target major tech firms that use loopholes in the tax system to ‘dodge‘ tax.
According to Reuters, the G20 group of nations have asked the Organisation for Economic Co-operation and Development (OECD) to draw a draft policy to prevent companies from shifting their profits into offshore tax-havens, so that they pay less tax in the countries of operation.
OECD was established in 1961 as an international economic organisation of 34 countries to stimulate economic progress and world trade.
The news agency has reported that the OECD is now due to present an action plan highlighting broad areas where changes will be discussed to a G20 meeting later this month.
Reuters reported that it has seen a preliminary draft of the plan, which shows the organisation has already identified a number of specific profit shifting schemes.
As per the draft seen by the news agency: "Domestic and international tax rules should be modified in order to more closely align the allocation of income with the economic activity that generates that income."
Google, Amazon and Starbucks are currently being probed by the UK lawmakers for using complex accounting methods avoid tax liabilities in the country.
Earlier this month, it was reported that Apple avoided paying UK corporation tax in 2012.
Vodafone has also said it did not pay corporation tax in the UK for the year to March 2013, even though it generated over £5bn in revenues in the country.
This article is from the CBROnline archive: some formatting and images may not be present.
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