Group of 20 finance ministers approved measures to curb corporate tax avoidance that have been under debate for more than two years, as Germany’s representative called for further steps to be taken and swift implementation.
At the annual meeting of the International Monetary Fund in Lima, the G-20 finance chiefs gave their final blessing to the Base Erosion and Profit Shifting project, paving the way for its debate at the G-20 heads of state meeting in Antalya, Turkey, in November.
“We have to work on a post-BEPS agenda,” German Finance Minister Wolfgang Schaeuble told reporters in Lima Friday. The G-20 must also put their agreement to work “because if there is no implementation, it remains an impressive amount of paper.”
The G-20 is seeking to reverse revenue losses the Organization for Economic Cooperation and Development estimates at as much as $240 billion annually, or around 10 percent of global corporate income tax revenues. Current gaps allow corporations to shift profits to low tax or no tax environments, where little or no economic activity takes place.
U.K. Chancellor of the Exchequer George Osborne said in Lima the BEPS plan will be implemented by Britain at the “next fiscal event,” indicating it will form part of his Autumn Statement to Parliament on Nov. 25.
Osborne, one of the main backers of the push to crack down on tax avoidance together with Schaeuble, first set out by the OECD in 2013, said “we have been more than impressed by the progress made internationally to develop the plan.”
“Base erosion and profit shifting is sapping our economies of the resources needed to jump-start growth, tackle the effects of the global economic crisis and create better opportunities for all,” OECD Secretary-General Angel Gurria said. The OECD has been working on the plan at the request of the G-20.