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| OECD launches plan to stop firms 'abusing' tax rules | |
| (35 minutes later) | |
| Existing tax rules need updating as they can be "abused" by multinational companies, according to the Organisation for Economic Co-operation and Development (OECD). | Existing tax rules need updating as they can be "abused" by multinational companies, according to the Organisation for Economic Co-operation and Development (OECD). |
| It has launched a plan to update and co-ordinate national tax laws. | It has launched a plan to update and co-ordinate national tax laws. |
| There was criticism in the UK earlier this year when it emerged that Google, Starbucks and Amazon paid little tax despite have big UK operations. | There was criticism in the UK earlier this year when it emerged that Google, Starbucks and Amazon paid little tax despite have big UK operations. |
| Following that criticism Starbucks agreed to pay more tax. | Following that criticism Starbucks agreed to pay more tax. |
| The OECD came up with the plan at the request of the G20 group of leading nations. Finance ministers start a two-day meeting in Moscow on Friday. | The OECD came up with the plan at the request of the G20 group of leading nations. Finance ministers start a two-day meeting in Moscow on Friday. |
| OECD secretary-general Angel Gurria said: "International tax rules, many of them dating from the 1920s, ensure that businesses don't pay taxes in two countries - double taxation. | OECD secretary-general Angel Gurria said: "International tax rules, many of them dating from the 1920s, ensure that businesses don't pay taxes in two countries - double taxation. |
| "This is laudable, but unfortunately these rules are now being abused to permit double non-taxation." | "This is laudable, but unfortunately these rules are now being abused to permit double non-taxation." |
| It is calling for greater international co-operation to close gaps that allows income to "disappear" for tax purposes. | It is calling for greater international co-operation to close gaps that allows income to "disappear" for tax purposes. |
| The OECD also said that tax income should reflect the economic activity it generates. | The OECD also said that tax income should reflect the economic activity it generates. |
| That would address some of the criticism aimed at big companies. | That would address some of the criticism aimed at big companies. |
| Duty to shareholders | Duty to shareholders |
| Earlier this year, Google was fiercely criticised by UK MPs for routing £3.2bn of UK sales through Dublin and paying little tax as a result. | Earlier this year, Google was fiercely criticised by UK MPs for routing £3.2bn of UK sales through Dublin and paying little tax as a result. |
| Starbucks has been questioned for transferring money to a Dutch sister company in royalty payments. | Starbucks has been questioned for transferring money to a Dutch sister company in royalty payments. |
| And Apple's chief executive Tim Cook was questioned by US lawmakers about the billions of dollars his company keeps in its Irish divisions. | And Apple's chief executive Tim Cook was questioned by US lawmakers about the billions of dollars his company keeps in its Irish divisions. |
| The companies point out that these schemes are legal and they have a duty to their shareholders to minimise their tax bills. | The companies point out that these schemes are legal and they have a duty to their shareholders to minimise their tax bills. |
| British Prime Minister David Cameron said he was "delighted" the OECD had produced the report. | |
| "Taxpayers, governments and businesses all suffer when some companies manipulate the tax system to avoid paying their fair share of taxes," he said. | |
| The OECD hopes its recommendations will be put into action over the next two years and is working on an international legal structure that would help countries introduce the new rules quickly. | The OECD hopes its recommendations will be put into action over the next two years and is working on an international legal structure that would help countries introduce the new rules quickly. |
| "Multinationals still have not grasped that tax honesty is an integral part of corporate responsibility," said Florian Wettstein, professor of business ethics at the University of St. Gallen, based in Switzerland. | |
| "As a result, the public increasingly perceives them as hypocritical and untrustworthy." |