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Australia To Push For G20 Tax Action

by Mary Swire,, Hong Kong

05 December 2013

Australian Prime Minister Tony Abbott has kicked off his country's G20 Presidency with a call for improved international tax arrangements.

Commenting on the Presidency during a radio interview, Abbott stressed that changes are needed to ensure that "we don't have the kind of leakage from people's economies which we are currently getting through transfer pricing arrangements, particularly in an internet age." His concern is that it is easy for an online business "to purport to earn income by various pricing arrangements in low tax jurisdictions, and that's why this is an important challenge for us."

Abbott further contended that tax systems should be based on the principle "that you pay tax on your income in the country where that income is earned." He was clear that a company should not be able to transfer its earnings to a separate jurisdiction and thereby "pay zero or very little tax on them."

The G20 presidency passes to Australia from Russia. When leaders met in St. Petersburg in September, they endorsed plans to make the automatic exchange of information the global standard. They also agreed to steps for cracking down on base erosion and profit shifting (BEPS).

In October, Finance Ministers and Central Bank Governors confirmed that they were to receive regular progress reports from the Organization for Economic Cooperation and Development (OECD) and the Global Forum on Transparency and Exchange of Information for Tax Purposes.

The new global standard will be unveiled in February, 2014, along with a Model Competent Authority Agreement. The Forum will establish a mechanism for monitoring and reviewing the implementation of the standard, which should be in place by the end of 2015.

TAGS: Russia | compliance | Finance | tax | business | tax information exchange agreement (TIEA) | tax compliance | tax avoidance | tax incentives | revenue guidance | Organisation for Economic Co-operation and Development (OECD) | Australia | ministry of finance | tax authority | agreements | internet | tax planning | transfer pricing | tax rates | G20 | revenue statistics | tax reform | Tax | Tax Evasion

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