G20 FMs approve final standards for global tax reforms for MNCs

Finance ministers from India and other G-20 countries have endorsed the final detailed plan for putting in place a coherent and transparent global tax regime to curb artificial profit-shifting ways. Once implemented, the steps would bolster India’s efforts to prevent tax avoidance and illegal fund.

At the G-20 finance ministers meeting here, also being attended by Finance Minister Arun Jaitley, the final package of measures for a comprehensive, coherent and co-ordinated reform of the international tax rules was approved.

In a statement on Friday, the Paris-based think-tank Organisation for Economic Cooperation and Development (OECD) said at the meeting, chaired by Turkish Deputy Prime Minister Cevdet Yilmaz, the G-20 finance ministers expressed strong support for the Base Erosion and Profit Shifting Project.

Earlier this week, the OECD came out with the final detailed action plan for coherent and transparent international taxation norms for multinationals. Artificial profit shifting activities are estimated to be causing up to $240 billion loss annually.

The OECD/G-20 project provides governments with solutions for closing the gaps in existing international rules that allow corporate profits to be artificially shifted to low or no tax environments where little or no economic activity takes place.

The ministers also “renewed a commitment for rapid, widespread and consistent implementation of the BEPS measures and reiterated the need for the OECD to prepare an inclusive monitoring framework by early-2016 in which all countries will participate on an equal footing,” the statement noted.