G20 summit participants agree to tighten global tax rules

Sept. 6, 2013 at 4:40 PM
share with facebook
share with twitter

ST. PETERSBURG, Russia, Sept. 6 (UPI) -- Participants at the Group of 20 summit in Russia stepped up the pressure on tax avoidance by backing a plan to crack down on multinational companies.

Representatives at the G20 meeting in St. Petersburg also ratcheted up the global battle on tax evasion with plans to exchange tax information automatically among the G20 members by the end of 2015 and called on other countries to join the information exchange as soon as they could.

The idea behind the communique is for countries to better coordinate tax treaties to close loopholes multinational corporations exploit by registering in tax havens such as Delaware and the Cayman Islands, The New York Times said.

Starbucks last year paid no corporate tax in Britain despite generating sales of nearly $630 million. The company volunteered to pay in the future.

Apple, the most profitable U.S. technology company, avoided billions in taxes in the United States and around the world through a complex web of subsidiaries.

"G20 leaders committed to fight cross-border tax evasion, requiring financial institutions to learn where their customers are resident for tax purposes and report that information to tax authorities," a fact sheet released by the White House said. "This measure will help to stop tax cheats from hiding their money in foreign bank accounts."

The St. Petersburg Summit marked the first time since the global financial meltdown five years ago that didn't take place "under the looming threat of financial crisis," the White House said in a statement. "Instead, G20 leaders were focused on securing and deepening the gains we have made -- and the key role of growth and jobs in this effort."

The participants also agreed to an action plan that focuses on growth and job creation and will present their approaches at the 2014 G20 Summit in Brisbane, Australia.

"G20 leaders came to St. Petersburg mindful of the challenges that remain and reached a consensus on how to proceed, agreeing that our focus needs to be on creating the growth and jobs that put people back to work," the fact sheet summarizing the action plan said.

The action plan also seeks to reinforce economic stability in Europe with advanced countries agreeing to maintain a flexible approach in implementing fiscal strategies, while remaining committed to sustainable public finances, among other things.

Concerning the issue of climate change, the G20 leaders committed to using the expertise and institutions of the Montreal Protocol to phase down the production and consumption of hydrofluorocarbons, the powerful greenhouse gases that cause global warming.

Phasing down HFCs would yield enormous climate benefits, the fact sheet said, by reducing up to 90 gigatons of carbon dioxide equivalent between now and 2050.

The summit participants also said they support a World Trade Organization trade facilitation agreement, reaffirming the significance of the WTO to the multilateral trading system.

The participants also agreed to combat protectionism, saying, "Protectionist trade barriers weaken trade and investment," the fact sheet said.

The summit participants also agreed to establish a global nuclear liability regime to ensure appropriate and swift compensation for nuclear damage in the case of a nuclear accident, improve global labor conditions and food security, and strengthen anti-corruption efforts, among other things.

Related UPI Stories
Trending Stories