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UK MPs: OECD BEPS Project 'A Sticking Plaster'

by Jason Gorringe,, London

04 August 2016

New international rules to tackle global tax avoidance will not work properly until tax secrecy is eradicated, says a report released by the All Party Parliamentary Group (APPG) on Responsible Tax.

According to the APPG on Responsible Tax, the OECD's action plan for tackling base erosion and profit shifting (BEPS) has fallen short of creating the fair global system needed to combat global tax avoidance because of a lack of transparency.

The report raises concerns that the OECD recommendations simply patch up existing rules and are not sustainable for a tax system struggling to keep up with both digitalization and globalization. The report calls for a fundamental review of the way in which global companies are taxed.

The APPG on Responsible Tax has said that the OECD recommendations could bring new and greater complexities to the international tax system that could lead to the emergence of new loopholes.

Margaret Hodge, Chair of the APPG on Responsible Tax, said: "The OECD has done well to build consensus but the proposals are likely to fail to meet the challenge of tackling global tax avoidance. We need to open up the affairs of global companies to public account if we are to clean up the widespread abuse that pervades so many international businesses. Only when we know who owns what, where the assets are owned, where the money is earned, and what tax has been paid, can we have confidence in the fairness and integrity of the tax system."

"The new rules add to an already complicated tax system. Corporations, aided by an army of advisors, banks, and lawyers, can exploit these rules to avoid paying tax where value is genuinely created. This could further undermine public trust in the tax system."

TAGS: tax | business | tax avoidance | mining | law | United Kingdom | transfer pricing | Tax | BEPS

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