Sadly, The End Is In Sight For Multinational Tax "Rorts"

A two-year effort to clamp down on multinational tax rorts will come to a head in Paris overnight.

Sadly, The End Is In Sight For Multinational Tax "Rorts" 1444014875503

Sadly, The End Is In Sight For Multinational Tax "Rorts" 1444014875503

The Organisation for Economic Cooperation and Development will finalise recommendations on its 15-point "Beps" action plan, ahead of a meeting of G20 finance ministers in Lima in Peru that starts on Thursday.

The goal of the Beps (Base Erosion and Profit-Shifting) initiative is to ensure that multinationals can't continue exploiting differences in countries' tax laws to avoid paying tax on their profits.

Companies including Google, Apple and Amazon have been accused of using creative accounting techniques with comical names such as the "double Irish" and "Dutch sandwich" to move profits around the world and build up billions of dollars of cash reserves in tax havens.

Will the new rules make any difference or will these companies just find new tax loopholes?

Time will tell, but they should make a difference. The OECD has been single-mindedly focused on changing the rules and encouraging the exchange of information between tax authorities, so multinationals have to pay tax on their profits somewhere.

What is being proposed is the biggest shake-up of the international tax system since the 1920s.

So does this mean multinationals will pay more tax in New Zealand?

Don't expect a big effect immediately, but it could have that effect over time. The fundamental principle will remain that companies will pay company tax where they do their work, not where they sell their goods.

So if Google and Amazon don't employ many people in New Zealand or do much research and develop here, there is no reason why they will suddenly pay much more tax here either.

http://www.stuff.co.nz/business/industries/72714935/end-in-sight-for-multinational-tax-rorts

Sadly, The End Is In Sight For Multinational Tax "Rorts"

Sadly, The End Is In Sight For Multinational Tax "Rorts"

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