Technology companies such as Facebook, Apple and Google have been told they need to stop extreme tax planning, according to the man charged with reforming global tax rules who told the BBC.
New standards would require businesses to pay even more tax in the countries where they have sold goods or created revenues, said Pascal Saint-Amans who runs the OECD’s Centre for Tax Policy. Companies should not use tax havens to shelter their profits, he said.
Mr Saint-Amans’ involvement is because of years of complicated negotiations and endless summits on reforming the issue of where large, multi-national companies pay their taxes. There should be an international agreement on possible upcoming tax laws ready for the G20 summit of global leaders in November, he revealed.
Before 2020, the implementation phase should mean that the rules are in place. According to Mr Saint-Amans, this will also mean that technology companies such as Facebook, Apple and Google have to pay more tax to the UK Treasury. In addition to this, they will also be required to pay more tax in a number of other countries and publish, country-by-country, how much they pay.
The UK has already agreed to new rules on the taxation of multi-nationals and the government predicts that companies that operate in the UK but paying tax in other jurisdictions, such as Google, will be obliged to pay hundreds of millions of pounds more in tax in Britain.
The technology companies that have been found by tax campaigners say that they continue to follow all of the rules laid down by governments and that it is for the governments to decide how they tax businesses, therefore they have not broken tax rules.