Saturday, July 23, 2016

Tax optimization: G20 pat fist on the table – Les Echos

G20 Ministers Saturday called on China to strengthen the coordination of their tax administrations and exchange of financial information, to curb aggressive optimization practices of multinational and offer increased stability for investors. End the “shortcomings” of tax systems due to poor international coordination “will change the choices that companies make,” said the US Treasury Secretary Jack Lew, ahead of other central bankers of the G20.

“Today, technologies blur the lines” tax, making it more difficult “to understand where value is created,” added Lew. “We need a common standard on the value of transfers,” concluded the American minister, calling for resolving “collectively” issues related to inter-state trade tax data.

A position supported by several of its G20 counterparts, and by the Secretary General of the OECD Angel Gurria, also present in the capital of Sichuan. “In the 21st century, talent, capital and even infrastructure are becoming increasingly mobile, how to create value change, this affects the efficiency of tax systems,” he insisted. “How many of Apple, Starbucks or Google there-he?”, Questioned Gurria. “This is a clear global debate, crucial.” Nevertheless, he acknowledged that the tax “remains a subject eminently sovereignty” of states.

Chinese Reluctance

However, forty countries have already committed to enhance “transparency for international companies” (country reporting) as part of a plan called OECD BEPS –acronyme designating optimization fiscale– . A European directive also provides for the automatic exchange of information on companies between tax authorities of different countries.

“We need to deepen international tax coordination, relying on existing mechanisms “cautiously echoed the Chinese Finance Minister Lou Jiwei –in spite of Beijing’s reticence on the subject.

at their last meeting in Washington in mid-April, following scandal “Panama Papers”, the ministers of G20 finance had advocated greater financial transparency, calling to develop the means to know who is behind front companies. The topic is back on the agenda of Chengdu.

“Considerable progress has been made in Washington,” where the Europeans had proposed the establishment of a “list black “of countries respecting common criteria of transparency and the possibility of retaliatory measures, observes the French minister Michel Sapin. “There may be reluctance, not only Chinese, but (…) we must move forward” based on work by the OECD, he told AFP.

Source AFP

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