The world’s most developed countries have announced further plans to attempt to close the loopholes on tax-avoiding multinationals, which cost the global economy more than €100 billion each year.
Big names such as Google and McDonald’s have managed to save generous amounts of money that would be otherwise spent on taxation, without breaking the law. In order to stop such occurrences, the Organisation for Economic Cooperation and Development, have revealed a plan with proposals to be adopted by the governments, in order to prevent firms from exploiting various countries’ “soft” taxation legislation, the countries known as ‘tax havens’.
Pascal Saint-Amans, who was the so-called “Base Erosion and Profit Shifting” (BEPS) Supervisor has stated that the ‘playtime is over’, implying for multinational companies. According to his prediction, companies will now face a harder stance on manipulating tax laws.
‘Today, there are wide open roads. Tomorrow, those who want to bypass their taxes will have to do so undercover. We are covering the ground with radars’.
– Pascal Saint-Amans, BEPS plan Supervisor.
The anti-tax avoidance plan, which is applicable to international firms with a minimum revenue of €750 million, is to be submitted to a G20 leaders’ summit the forthcoming November for their acceptance. The plan could tackle the loss of tax revenue amounting to 4-10% of global tax revenues.
According to the BEPS plan, each multinational company will be forced to pay taxation in the country where its main business activity is situated.