OECD to Call on Nonmember Economies to Cooperate on Tax Avoidance

Tokyo, June 20 (Jiji Press)--The Organization for Economic Cooperation and Development plans to call on nonmember economies to cooperate in tackling tax avoidance by multinational corporations, Jiji Press learned on Thursday. The OECD, which has 34 member countries, believes that cooperation with nonmember economies is crucial for closing tax system loopholes around the world, a Japanese government official said. The OECD aims to clarify cooperation among countries around the world in an upcoming action plan on tax avoidance, the official said. The plan, expected to be drawn up later this month, will reflect discussions at the Group of Eight summit in Northern Ireland earlier this week. Tax avoidance by transnationals including Apple Inc. and Starbucks Corp. are believed to be causing huge losses in corporate tax revenues in many economies. Still, it remains uncertain whether OECD members and nonmembers will be able to unite to combat tax avoidance, as disagreement is already being seen among advanced economies. The OECD is also reviewing the scope of systems that allow base erosion and profit shifting for tax avoidance, planning to deem tax preferences for foreign companies as harmful. It will promote work to develop a system that will allow tax authorities across national borders to share information on tax payments by corporations. The OECD is expected not to question the existence of low tax rates in economies used as tax havens, as setting tax rates falls under national sovereignty. END