Tax Evasion and the G8
- Jun 18, 2013 | Gail Cole
On the agenda of the 39th G8 summit--bravely put there by British Prime Minister David Cameron--is tax evasion.
National Public Radio tidily sums up the international tax evasion situation: Globe-trotting companies exploit loopholes and "shift profits into foreign shelters that charge little tax or none." The tax practices of such multinational corporations such as Amazon, Starbucks, Apple and Google have all come under scrutiny recently. The European Union loses an estimated one trillion euros to tax evasion and avoidance each year.
The Guardian credits Mr. Cameron for putting on the agenda "the ease with which multinational companies shift profits round the world." As British Chancellor George Osborne has noted, the existing system does not meet the needs of the modern world; it was created in the 1920s, in the shadow of the first world war.
The world leaders meeting in Northern Ireland have "agreed to share tax information and to change rules that allow companies to shift profits across borders." Their goal? "'[T]o fight the scourge of tax evasion.'
Agreeing on "a broad set of principles" sounds like a step in the right direction. Yet according to The Guardian, the 10-point plan is "a windy document that commit[s] the west's leading industrial nations to do little specific." Can anything be accomplished when there is so much "wriggle room?"
Successfully managing taxes is better than avoiding them. How does your business handle sales tax?