- Aug 27, 2009
BBC News - UK, France and Germany to back global tax rules at G20The UK Chancellor George Osborne and his French and German counterparts are to call for global tax rules to clamp down on corporate tax avoidance.
The three will seek backing from other leaders at the G20 summit in Moscow.
A survey carried out by the OECD found that multinational companies could exploit gaps between the tax rules in different countries they operated in.
Back in the spotlight! George and his French and German counterparts agreed in December to try and battle companies engaging in tax shopping, and they mentioned Ireland and Netherlands at the time. Now they take the show to the G20. It's something Obama's on board with as well:
Obama corporate tax reforms may hinder FDI into Ireland - Independent.ie
And it's natural for them to want this. If Facebook earn 90% of their revenue in the US, you can understand the argument that the US is where they should pay their corporate tax, or that they should pay 90% of it there.Facing elections in November, Mr Obama unveiled a series of measures last night to tax American companies operating overseas. The president's proposed reform of America's corporate tax code includes a minimum tax on profits made by US firms overseas -- negating one of the key reasons for many US companies to set up in Ireland.
But how do you do that? It's easier for the US (although a step down the protectionist route) to say that companies registered there have to pay their tax there, and simply crush anyone who doesn't comply through regulations.
But how in the EU? You can't tell me where to pay my corporate tax at the moment without unanimous reform. And what would this reform look like? Would Mercedes have to pay all the corporate tax in Germany, despite raising most of it's revenue outside? Would they have to pay in each country they sold to? And if they did, why would they have to but not Tom the farmer who exports 5k of milk a year to France?
I'm guessing they'll reach an accord to do something without defining what that something is.