The organization has a 15-point plan designed to stop corporations from moving profits overseas and saving billions of dollars in profits. July 19, 2013 8:58 AM PDT Apple, Google, Amazon, and other major technology firms are likely keeping a close eye today on a G20 Summit. The Organization for Economic Cooperation and Development (OECD) announced on Friday at the G20 Finance Ministers' Summit in Moscow a plan to limit the impact companies are having on international tax revenues. Dubbed the Action Plan on Base Erosion and Profit Shifting, the roadmap explains how governments around the world can increase tax revenues from major corporations. The Plan's 15 points specifically target domestic and international tax rules that allow companies to sidestep paying taxes. "The Action Plan will develop a new set of standards to prevent double non-taxation," the OECD announced on Friday. "Closer international co-operation will close gaps that, on paper, allow income to 'disappear' for tax purposes by using multiple deductions for the same expense and 'treaty-shopping.' Stronger rules on controlled foreign companies would allow countries to tax profits stashed in offshore subsidiaries." Related stories Sprint must face NY tax-fraud case, says judge Apple paid no U.K. tax last fiscal year, despite millions in profits U.K. watchdog demands probe into Google tax affairs Apple owes France $6.5 million in unpaid taxes Work wrapping up on global deal to nix tech product duty Apple, Google, Facebook, and several other major technology companies have been chastised as of late for paying a relatively small sum in taxes on giant profits. Earlier this month, the Financial Times ran a report, saying that Apple paid no taxes in the U.K., despite generating millions in profits. The company sidestepped the taxes by offering stock options to employees. That report came just months after reports surfaced of major companies paying pennies on the dollar in taxes by moving profits to tax safe havens through subsidiaries. In total, governments around the world contend that major corporations -- and not just those in the technology industry -- are eliminating billions of dollars in taxes. All of those companies, it should be noted, are using tax strategies that are fully allowable under current law. The OECD plans to change that with its latest action plan. However, countries shouldn't expect much to change anytime soon -- the OECD expects the plan to be implemented over the next 18 to 24 months. How companies will respond to the new plan should be awfully interesting.
The organization has a 15-point plan designed to stop corporations from moving profits overseas and saving billions of dollars in profits.
Apple, Google, Amazon, and other major technology firms are likely keeping a close eye today on a G20 Summit.
The Organization for Economic Cooperation and Development (OECD) announced on Friday at the G20 Finance Ministers' Summit in Moscow a plan to limit the impact companies are having on international tax revenues.
Dubbed the Action Plan on Base Erosion and Profit Shifting, the roadmap explains how governments around the world can increase tax revenues from major corporations. The Plan's 15 points specifically target domestic and international tax rules that allow companies to sidestep paying taxes.
"The Action Plan will develop a new set of standards to prevent double non-taxation," the OECD announced on Friday. "Closer international co-operation will close gaps that, on paper, allow income to 'disappear' for tax purposes by using multiple deductions for the same expense and 'treaty-shopping.' Stronger rules on controlled foreign companies would allow countries to tax profits stashed in offshore subsidiaries."
Related stories
- Sprint must face NY tax-fraud case, says judge
- Apple paid no U.K. tax last fiscal year, despite millions in profits
- U.K. watchdog demands probe into Google tax affairs
- Apple owes France $6.5 million in unpaid taxes
- Work wrapping up on global deal to nix tech product duty
Apple, Google, Facebook, and several other major technology companies have been chastised as of late for paying a relatively small sum in taxes on giant profits. Earlier this month, the Financial Times ran a report, saying that Apple paid no taxes in the U.K., despite generating millions in profits. The company sidestepped the taxes by offering stock options to employees.
That report came just months after reports surfaced of major companies paying pennies on the dollar in taxes by moving profits to tax safe havens through subsidiaries. In total, governments around the world contend that major corporations -- and not just those in the technology industry -- are eliminating billions of dollars in taxes.
All of those companies, it should be noted, are using tax strategies that are fully allowable under current law.
The OECD plans to change that with its latest action plan. However, countries shouldn't expect much to change anytime soon -- the OECD expects the plan to be implemented over the next 18 to 24 months. How companies will respond to the new plan should be awfully interesting.
