G20 leaders vow to crack down on tax evasion by multinationals
U.S. President Barack Obama (2nd L) listens as President Xi Jinping of China (R) speaks during their meeting at the G20 Summit in St. Petersburg, Russia September 6, 2013. REUTERS/Kevin LamarqueThe Group of 20 leading economies has decided to force the world\’s largest multinational companies to pay more taxes.
The heads of state at the annual G20 summit in St. Petersburg, Russia, agreed Friday to support a tax plan crafted by the Organization for Economic Cooperation and Development. It would eliminate loopholes that allow many companies to hide profits in tax havens and force them to pay taxes in the countries where they make money.
In an end-of-summit statement, the G20 endorsed the automatic exchange of tax information among nations to prevent corporations from keeping money in undisclosed foreign bank accounts.
The G20 said corporate strategies to keep profits in offshore accounts, "if left unchecked, undermine the fairness and integrity of our tax systems."
Finance ministers from the G20 countries, which produce 90 percent of the world\’s economic output, are also expected to endorse the plan at the end of their two-day meeting Saturday in Moscow.
Some of the world\’s largest multinational corporations — based in one country, but with substantial operations in other nations — have often been able to avoid heavy taxation in their home countries by keeping their earnings elsewhere.
In one instance, U.S. Senate investigators earlier this year found that technology giant Apple, through use of technicalities in Irish and U.S. law, was able to legally avoid virtually all taxes on at least $74 billion in earnings over the last four years.
Such other big U.S. firms as the Google search engine company and the Starbucks coffee chain could be affected by the G20 action, although officials said it could be years before the changes take effect.
Source: VOA and agencies
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