Plans for a major rewriting of international tax rules unveiled yesterday could eliminate ristrictions that have allowed companies like Google Inc and Amazon.com Inc to shave billions of dollars off their tax bills.
The Organisation for Economic Co-operation and Development (OECD) announced a series of measures that, if implemented by members, could stop companies from employing many commonly-used practices to shift profits into tax havens.
Corporate tax avoidance has become a hot political topic following media coverage and parliamentary investigations into the arrangements many big companies use to cut their tax bills.
Amazon and Google say they pay all the taxes they should. Analysts say competitive pressures force companies to seek to minimise all costs, including tax.
Last year, the Group of 20 leading economies asked the OECD to develop an action plan to tackle the problem.
Big U.S. technology companies could be those most affected by the OECD’s plans but others could also be impacted including pharmaceuticals and branded consumer goods, as well as many European companies.
The draft proposals announced have been agreed by all G20 members and OECD members, which include most major industrialised countries, the OECD said in a statement.
