G20 leaders must act to rein in corporate tax dodgers: Aus PM

World leaders at G-20 stage need to come together to check tax evasion running into billions of dollars globally by companies that use taxation loopholes in shifting profits from one country to another, Australian Prime Minister Tony Abbott said today.
Abbott, the host of the two-day G20 Summit beginning here on November 16, said that the leaders of the world's most advanced economies should use this platform to make a commitment to rein in such tactics used by companies to "minimise" their tax liabilities.
Abbott said the world had a "collective self-interest" to curb the rapidly growing practice of profit shifting by companies and tax evasion by wealthy individuals.

"If they don't, the burden would fall increasingly on a smaller pool of taxpayers," he added.
"There's a collective self-interest on everyone because if entity A pays less tax than it should, it means entities B, C, D, E, F, G. H, I etcetera are paying more tax than they should," he told 'The Australian Financial Review'.
"And while Australia's company tax receipts are still relatively healthy, increasingly, companies have more and more opportunities to minimise their tax.

"It's in everyone's interests - not that we overtax companies - that they do pay tax in the jurisdiction where they make their money," he said.

The report said Abbott will push fellow G20 leaders to make good on an agreement that was progressed by the finance ministers in Cairns in September to tackle evasion by companies and individuals.
In 2013 the G20 finance ministers agreed to implement seven points of a proposed 15-point base erosion profit shifting action plan and the Australian G20 will push to implement the remainder, all of which is aimed at securing revenue.
The leaders are also expected to endorse common reporting standards agreed to by the finance ministers, which target tax evasion by individuals from 2017 onwards.
To broaden the reach of these standards to outside the G20, there will be pilot scheme in which a G20 country of Spain will team up with the non-G20 country of Colombia, the report said.

Abbott said there's "nothing wrong with minimising your tax, but we want to make sure the way countries conduct themselves does not facilitate that. This is a problem for every jurisdiction, certainly for every G20 jurisdiction, because inevitably businesses want to minimise their tax."
"What we want is a commitment across the G20 that companies should pay tax in the jurisdictions in which they make their profits," the Australian Premier said.
While tax experts have warned of legal and political difficulties in taking on such multinationals as Google and Apple, Abbott said he did not think the problem was insurmountable, the report said.

"If we can get that commitment (at the G20), then I think officials working together can help to work out systems that will make that a reality," he said.