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Huge step-change in international tax agreements at first G8 summit with tax at the top of the agenda
G8 leaders have committed at the G8 summit in Lough Erne to agree to further transparency on the sharing of tax information - and bring the international tax rules into the modern age.
As the summit closed the G8 leaders’ communiqué announced that they will move to establish the automatic exchange of information between tax authorities as the new global standard and will work with the OECD to develop a model for this.
The G8 leaders stated their support for the OECD’s work to tackle tax avoidance by multinational companies, and announced that they will draw up a template for global corporations to report to tax authorities where they make their profits and pay taxes around the world.
This will give governments a new tool against tax avoidance by multinationals and will be particularly helpful to the governments of developing countries.
The G8 will provide support to developing countries to collect the tax they are owed.
Following the UK’s announcement that it will establish a register of company ownership, the G8 agreed to publish action plans to require companies to obtain and hold information on who really owns and controls them, and ensure this information is available to tax authorities and law enforcement, including through central registries.
Earlier this year Prime Minister David Cameron identified tax as one of the three areas he wants to concentrate on during the UK’s presidency of the G8 - alongside trade and transparency.
The government has also announced further plans to assist developing countries in strengthening their tax systems - also known as capacity building - in order to help them claim the tax which they are owed and benefit from information exchange.
The Department for International Development (DfID) will fund a programme of international tax seminars where HMRC tax experts will share their experience and expertise on negotiating information exchange agreements with counterparts in developing countries and support them in joining in the Multilateral Convention on the sharing of tax information.