Rocky road ahead for global anti-tax evasion framework

17 Sep

anti tax-evasion frameworkFinance ministers and central bankers from the Group of 20 countries are working to create an international framework to curb tax evasion, but differing attitudes over the recent back taxes imposed on Apple and other obstacles could stand in the way.

There have been growing calls for stricter tax regulations around the world since the Panama Papers leak revealed how serious the problem is.

The Organization of Economic Cooperation and Development is trying to create international regulations, such as establishing the regular exchange of financial account information between different countries’ tax authorities.

In June, OECD members agreed to create by July 2017 a list of countries and regions that are not helping to curb tax evasion. Over 100 countries and regions are expected to join the framework to crack down on excessive evasion by multinational corporations.

Japan has been developing legislation based on the OECD rules, and plans to create an even tougher scheme under tax reforms planned for fiscal 2017. The National Tax Agency is also preparing to take part in an international framework.

The G-20 in July applauded the recent developments against tax evasion. Even Panama, often considered a tax haven, signed an agreement with Japan in August to share account information.

But rifts remain. When the European Commission ordered Ireland to collect additional taxes from Apple, both the Irish and U.S. governments pushed back. Washington slammed the decision as one-sided, likely over concerns that the tech giant will end up paying less taxes in the U.S. if it pays more in Europe. The U.S. also suspects that Apple may have been unfairly targeted.

Source: Nikkei

Photo credit: Herr Olsen via VisualHunt / CC BY-NC

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