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1 of 1President Obama, David Cameron and Angela Merkel at the G8 Stefan Rousseau/AP
Britain hopes to make “real concrete progress” today on tightening international tax rules which allow rich companies and individuals to hide their wealth and avoid paying their fair share, George Osborne said from the G8 Summit in Northern Ireland.
David Cameron has put action on tax havens, and transparency about the ownership of large international companies and the assets of rich individuals, at the top of his agenda for the two-day meeting of the leaders of eight of the world’s largest economies.
Speaking before this morning’s session on tax, which he has been invited to attend as a guest, the
Q: Will it be harder for corporations and individuals to dodge taxes as a result of the G8 summit?
A: David Cameron hopes so, but it is too early to tell.
Q: Is it the business of the G8 to write tax rules?
A: No. Much of the detail will have to be worked out by the larger group of G20 countries and, ultimately, by the OECD in September.
Q: What does Mr Cameron want?
A: Action on two main areas. The first is legal tax avoidance by companies.
He wants the G8 to give an unignorable push to the OECD to rewrite global tax rules to tackle the scourge of shifting profits offshore to avoid tax. Google and Amazon have been accused of this, resulting in their minimal corporation tax bills. The OECD will discuss this in the autumn.
Q: Anything else?
A: Mr Cameron wants tax authorities to share data automatically. Britain, France, Germany, Italy, Spain and the US are piloting such a system to see who is paying taxes and where. The Prime Minister won the agreement of Britain’s crown dependencies and overseas territories, such as Jersey, Guernsey and the Cayman Islands, to do the same, strengthening his hand at the G8.
Q: Will others follow?
A: Some G8 countries, such as Canada, are wary. There are concerns that developing countries lack the necessary IT to handle such data, and might abuse it. Some richer nations want tax details shared only when requested. Campaigners say the sharing must be automatic or developing countries in particular will continue to be fleeced by corporations.
Q: What about illegal tax evasion?
A: Mr Cameron wants all countries to publish a register of ownerships, showing who ultimately profits from a company. This is aimed at offshore shell companies and other tax-evading vehicles. Mr Cameron has promised a UK list, which he may make public.
Q: Will he win this one?
A: Not today. The best Mr Cameron can probably hope for is a vague promise from the others to draw up their own "action plans".
Roland Watson
