read the news // live the culture

UK and Germany propose crackdown for multinational tax avoidance

  Tuesday 6th November 2012

George Osborne has now combined forces with the German finance minister, Wolfgang Schäuble, to declare an international crackdown on tax avoidance by large companies.

Following the meeting of the G20 finance ministers in Mexico, George Osborne had pleaded for “concerted international co-operation to strengthen international tax standards that at the minute may mean international companies can pay less tax than they would otherwise owe”.

hmrcpic

A crackdown on big corporations may result in more money for the country. Photo: Fotolia

While none of the ministers gave any names regarding which corporations they will battle, it was said that globalisation and technological improvements have ensured governments were unable to keep up with the fast-paced, changing nature of business, which has led to many organisations avoiding paying tax.

The two finance ministers have said they will look into which loopholes need urgently closing as a first step in ensuring that profit-shifting is better dealt with on the global level.

After the meeting, Osborne said: “We want competitive taxes that say Britain is open for business and that attract global companies to invest in and bring jobs to our country, but we also want global companies to pay those taxes. The best way to achieve that is through international action that ensures strong standards, without pricing ourselves out of the global market.

The statement, which was written by both the British and German finance ministers, reads that “international tax standards have had difficulty keeping up with changes in global business practices, such as the development of e-commerce in commercial activities”.

The statement follows by saying: “As a result, some multinational businesses are able to shift the taxation of their profits away from the jurisdictions where they are being generated, thus minimising their tax payments compared to smaller, less international companies.”

Due to growing grievances from the general public regarding tax avoidance by big corporations, the government has decided it is finally time to push to resolve this issue.

Alexander Clackson

More about the author


Share this story


  • Pin It
  • Share on Google+
  • Reddit
  • Stumble
  • LinkedIn

Latest related

Oscar and the Wolf at Birthdays | Live review
Oscar and the Wolf at Birthdays

As a bright-eyed, spotty teenager a free live gig often meant seeing a friend’s band play in your local pub’s [read more]

Believe | Movie review
Believe

Among the hundreds of complex, novel and boundary breaking films that have been released over the past few years, [read more]

Joe | Movie review
Joe

David Gordon Green is becoming one of the most versatile Hollywood directors as his filmography is extremely varied, [read more]

Earth to Echo | Movie review
Earth to Echo

There’s no shame in openly drawing inspiration from others: nothing is truly original after all. Wearing influences [read more]

Who Is Dayani Cristal? | Movie review
Who Is Dayani Cristal?

No matter where you are in the world, mentioning immigration will evoke every feasible opinion there is to have. A [read more]

Archives