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U.S., Panama, United Arab Emirates among countries undermining global action on tax dodging
Oxfam harshly criticized the United States, the United Arab Emirates, Panama and other countries for undermining a landmark global initiative to tackle corporate tax dodging unveiled today.
At a ceremony in Paris, ministers from over 60 countries signed up to an OECD convention to incorporate anti-tax dodging measures into tax treaties in a coordinated and consistent way. This will make it harder for multinational companies to use tax treaties to avoid paying their fair share of tax – especially in developing countries.
However, the U.S., the United Arab Emirates, Panama were some of the countries who did not sign up to the convention, while others such as the United Kingdom, Luxembourg, Belgium, Austria and Switzerland opted out of critical elements. Mauritius, a major corporate tax haven for Africa, expressed an intent to sign on later, but it’s unclear what their terms would be.
Francis Weyzig, tax policy advisor at Oxfam, said:
“This initiative could be a major moment in the fight against tax dodging. Unfortunately, some countries refused to sign on, while others filed dozens of pages of caveats and exceptions, giving corporate tax dodgers freedom to keep lining their pockets at the expense of their citizens and people across the globe.
“Any government that genuinely wants to tackle corporate tax abuse must adopt the convention in full and apply it to all their tax treaties – including tax treaties with developing countries.
“OECD-led measures to tackle corporate tax dodging are welcome, but more global action is needed to stop corporate tax dodging and end the downward spiral in corporate tax rates. The momentum from this initiative must be harnessed for real progress to be made.”
The convention signed today forms part of the OECD’s Base Erosion and Profit Shifting (BEPS) project, which aims to tackle corporate tax dodging.
The full list of signatories of the Organisation for Economic Cooperation and Development (OECD) Multilateral Convention to Implement Tax Treaty Related Measures, the overview of bilateral treaties that signatories agree to modify through the convention, and the articles of the convention that signatories have committed to, is available from the OECD.
The UN estimates that tax dodging by multinational companies deprives poor countries of at least £80 billion ($100 billion) in much-needed revenue every year. That money could pay to educate the 124 million children currently not in school and fund healthcare to save the lives of six million children.
Anna Ratcliff: +44 7796993288 or email@example.com