19 Jun 2013

Tax avoidance targetted by G8 meeting

5:59 am on 19 June 2013

G8 leaders in Northern Ireland on Tuesday agreed new measures to clamp down on money launderers, illegal tax evaders and corporate tax avoiders.

The measures include requiring shell companies - often used to exploit tax loopholes and invest money anonymously - to identify their effective owners.

Governments also agreed to give each other automatic access to information on their residents' tax affairs.

British Chancellor George Osborne said this will help to close loopholes that allow companies and individuals to avoid their fiscal responsibilities.

The BBC reports the measures are designed to combat illegal evasion of taxes, as well as legal tax avoidance by corporations that make use of loopholes and tax havens.

"Countries should change rules that let companies shift their profits across borders to avoid taxes," the summit communique said on Tuesday.

Multinationals should tell all tax agencies about what taxes they pay and where.

The communique urged countries to "fight the scourge of tax evasion".

Mr Osborne said more progress had been made on reforming the global tax system in the past 24 hours than the "past 24 years".

The G8 communique also demanded more transparency from mining firms.

The BBC reports many major mining companies use complex ownership structures in the Netherlands and Switzerland to avoid paying taxes on the minerals they extract in developing countries.

"Developing countries should have the information and capacity to collect the taxes owed them," the communique said.

"Other countries have a duty to help them."