The chairman of the Commons Public Accounts Committee has warned against countries “adopting a two-faced approach” to tax policy by signing up to international standards while engaging in tax competition.
Margaret Hodge, addressing the committee’s London conference on tax and globalisation, welcomed the UK government’s plans to stop companies moving profits offshore. Last month George Osborne indicated that his autumn statement on 3 December would target technology companies that “go to extraordinary lengths to pay little or no tax here”.
The allocation of taxing rights between countries, in relation to the profits of companies doing business in countries where they have little or no taxable presence under existing law, is a key issue being addressed by the OECD’s base erosion and profit shifting (BEPS) project. G20 leaders will discuss the OECD’s findings at their Brisbane summit next month.