G7 to include developing nations in tax projects

DRESDEN, Germany (Reuters) – The finance chiefs from the Group of Seven countries agreed on Thursday they wanted to involve developing countries in all their tax projects, such as an initiative to clamp down on corporate tax evasion, a German G7 delegation official said.

Helping poor countries to build up their tax administration would increase their own tax revenues and so improve their economic prospects, the official said.

"That's why there is a clear intention to involve the developing countries in all current tax projects as far ... as this is possible," the official told reporters.

The official said the G7 wanted to stick to a planned end-2015 deadline for implementing an anti-tax avoidance action plan – known as the anti-BEPS (Base Erosion, Profit Shifting) directive – to tackle the way corporations shift profits from one country to another in order to reduce tax.

More than 80 developing nations and countries which are not part of the Group of 20 leading economies or the Organization for Economic Cooperation and Development (OECD) countries have been consulted since the BEPS project was started, according to the OECD.

The G7 also aims to establish joint monitoring groups of countries for the taxation of international companies and set up a system to resolve disputes over where a company should pay taxes, the official said, adding: "But that's a longterm task."

Combating tax avoidance and tax evasion is one of the key themes at the G7 meeting in Dresden.