OECD unveils proposals to curb corporate tax avoidance

Tue Sep 16, 2014 12:50pm EDT
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By Tom Bergin

LONDON (Reuters) - New international tax rules proposed on Tuesday could eliminate structures that have allowed companies such as Google Inc (GOOGL.O: Quote) and Amazon.com Inc (AMZN.O: Quote) to shave billions of dollars off their tax bills.

The Organisation for Economic Cooperation 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 tax bills.

Amazon and Google say they pay all the taxes they should. Analysts say competitive pressures force companies to seek to minimize 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 hit, including pharmaceuticals and branded consumer goods firms, as well as many European companies.

Chris Morgan, Head of Tax Policy at accountants KPMG in London, said the proposals were "balanced" and while some firms would pay more tax, big business accepted the need for change.

Anti-poverty charity ActionAid criticized the plans saying some of the measures envisaged would be too expensive for developing countries to implement.   Continued...

A zoomed image of a computer screen showing the Amazon logo is seen in Vienna November 26, 2012.  REUTERS/Heinz-Peter Bader